Definition - What does Purchasing Group mean?
A purchasing group is an organization that buys liability insurance for its members at a lower price and with broader coverage than is available to individuals. These arrangements were made possible by the Liability Retention Act of 1986.
Insuranceopedia explains Purchasing Group
Prior to 1986, there was a liability coverage crisis. Liability insurance was too expensive and certain kinds of coverage were unavailable in some areas. The US congress passed the Liability Retention Act of 1986 to address this situation. Under this act, professionals, businesses, and municipalities within the same state could form a group to purchase better liability insurance policies
Purchasing groups and the insurers that sell to them are regulated by state insurance departments.
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