Risk Purchasing Group
What Is a Risk Purchasing Group for Insurance?
A Risk Purchasing Group (RPG) is a group of businesses with similar work — like massage therapists, cosmetologists, and estheticians — that buys liability insurance together instead of each person shopping alone.
An insurance company may use an RPG as the coverage structure offered to you. Think of it as “going in on” insurance together with a group of your industry peers, typically so you can each get a lower rate.
Why It Matters for Beauty and Bodywork Professionals
RPGs matter for beauty and bodywork professionals because they offer a practical way to get affordable insurance with coverage tailored to your industry’s risks.
They affect:
- How you obtain the policy
- Who you contact for administrative tasks versus who handles the claims
- Whether or not you share coverage limits with other RPG members
Real-life example:
Your landlord asks for a certificate of insurance for your suite rental contract. When you buy coverage online, the documents mention a “purchasing group.” You understand that this is a group purchasing structure, confirm your coverage details, and feel confident about your policy!
How Does a Risk Purchasing Group Work?
Here’s the simplified version:
- The insurance company creates an insurance program for professionals with similar liability exposures (for example, massage therapists, estheticians, and salon owners)
- That program is offered through a risk purchasing group structure
- Coverage is packaged by an insurance provider (like Beauty & Bodywork Insurance) from an insurance carrier (the company that actually pays out claims)
- You, the member, purchase and obtain an individual policy with your own coverage limits
| What It Does | What It Does Not Do | |
|---|---|---|
|
Risk Purchasing Group (RPG) |
Helps members buy liability insurance as a group |
It is not the insurance company |
|
Issues the actual policy and pays covered claims (per the contract) |
It doesn’t magically cover everything you assume |
|
|
Helps with purchase, paperwork, and coverage changes |
They’re not responsible for paying claims |
Questions to Ask if Your Coverage Is Through an RPG
Ask these questions about an RPG to feel confident before purchasing coverage:
- Who is the insurance carrier on the policy?
- What’s covered vs. not covered for my services (for example, hands-on work, devices, and mobile services)?
- What are my coverage limits and deductible?
- Are there any exclusions I should know about for my specific work?
- Do I pay fees to join the group? If yes, what are they and what do they cover?
- Can I cancel anytime, and how does the refund process work?
- Is the policy valid in my state and for the places I work (such as my home studio, salon suite, or mobile)?
Risk Purchasing Group vs Risk Retention Group: What’s the Difference?
A risk purchasing group (RPG) is a buying group, while a risk retention group (RRG) is an insurance company owned by its members.
As you shop for coverage, the main distinction to know is:
- Risk purchasing group: The structure of coverage for an industry group
- Risk retention group: An actual insurance company with members who take on their collective risk themselves
Does Joining a Risk Purchasing Group Change How Claims are Handled?
Typically, no. Claims are handled by the insurance carrier and follow the policy contract.
An RPG may affect:
- Who you contact first (providers vs. carrier)
- How the program is packaged (industry-tailored options)
- How you get proof of insurance
It typically does not change:
- That coverage depends on the policy language, limits, exclusions, and claims reporting requirements
If you purchase coverage with an RPG structure, your claims will still be handled by your carrier according to the insurance policy rules.
Additional Resources
Related Terms
- Carrier
- A- Rated Insurance Carrier
- Non-Admitted Insurer
- Underwriting
- Insurance Broker
- Insurance Agent
- Declarations Page (Dec Page)
