What type of insurance can risk retention groups write?

Risk retention groups (RRGs) are specifically designed to provide liability insurance coverage for their members, who are typically involved in similar businesses or professions. The primary function of these groups is to allow their members to pool their risks together in a way that mitigates the burdens of obtaining this insurance through traditional means.

By operating under the provisions of the Liability Risk Retention Act, these groups are focused on writing commercial liability insurance, which means that their coverage is largely limited to this type of insurance product. This focus on commercial liability reflects the nature of their formation—members commonly seek coverage for risks that pertain to their specific industry or business sector.

While RRGs can actually write other types of insurance if allowed by specific regulations, their core intent and operational framework are rooted in providing liability coverage for their members. Thus, the correct understanding revolves around the fact that risk retention groups primarily write commercial liability insurance for their members, aligning with the legislative intent behind their establishment.

This explains why the choice regarding the limitation to commercial liability insurance for members is accurate in the context of risk retention groups.