Purchasing groups exist to

Purchasing groups exist to

• A. Purchase liability insurance on a group basis
• B. Provide captive coverage
• C. Regulate insurers
• D. Offer health insurance to employees

Answer: (A)

Purchasing groups form to pool members’ liability exposures and buy liability insurance as a group, giving small businesses better access to coverage and stronger bargaining power with insurers. The group is the insured entity, and its members share the premium costs and terms arranged through the group, which often makes liability coverage more affordable or attainable than trying to buy individually. This purpose is distinct from creating captive coverage, regulating insurers, or offering health insurance to employees, which are not the functions of purchasing groups.

Purchasing groups form to pool members’ liability exposures and buy liability insurance as a group, giving small businesses better access to coverage and stronger bargaining power with insurers. The group is the insured entity, and its members share the premium costs and terms arranged through the group, which often makes liability coverage more affordable or attainable than trying to buy individually. This purpose is distinct from creating captive coverage, regulating insurers, or offering health insurance to employees, which are not the functions of purchasing groups.