Eagle Builders Insurance Company Risk Retention Group, Inc. (EBIC) is a liability insurance company that provides coverage to commercial construction businesses and government entities.
EBIC is a risk retention group (RRG), which is a type of captive insurance company that operates under state and federal laws.
In this article, we will explain what RRGs are, how they differ from other captives, what are the benefits and challenges of risk retention
What is a Risk Retention Group Insurance?
A risk retention group (RRG) is a state-chartered insurance company that insures commercial businesses and government entities against liability risks.
RRGs were created by the federal Liability Risk Retention Act, a federal law created in 1986.
A member of a risk retention group must be a business.
RRGs are mutual companies, meaning that they are owned by the members of the group.
They can be licensed as a standard mutual insurer, but they can also be licensed as a captive insurer
RRGs allow similar businesses with similar insurance needs to pool their risks and self-insure.
What is the Difference Between Captive and RRG?
Captive insurance companies can be domiciled anywhere in the world, while RRGs can only be domiciled in the United States.
This poses particular challenges for companies that do business internationally because RRG legislation only applies in the US
RRGs do not require fronting paper.
Fronting paper is used in some captive formations as a way to exist in an established insurance company
financial rating and filings across the US and internationally.
This becomes the insurance carrier name on all Certificates of Insurance, au (Travelers, AIG, etc.)to ID cards,
Stock in a captive can be owned by different entities than the insured.
In contrast, RRGs can only be owned by policyholders
The most crucial difference between captives and RRGs is the business written.
What is the Risk Retention Policy?
Risk-retention is an individual or organization’s decision to take responsibility for a particular risk it faces
That means the individual or organization has chosen to pay for any losses out of pocket rather than purchasing insurance
Risk-retention can either be done voluntarily or be forced. The decision to retain a risk voluntarily usually comes down to an economic calculation.
If the losses happen often enough to be budgeted many companies will choose to voluntarily retain the risk.
Other times, companies are forced to retain a risk or loss.
This happens when the risk is either excluded from their coverage, uninsurable or when the value of the loss is less than their policy deductible.
What is the RRG Policy?
An RRG policy is a liability insurance policy issued by a risk retention group to its members.
It provides coverage for the liability risks that the members face in their businesses or activities.
An RRG policy may include coverages such as general liability, professional liability, directors and officers liability, employment practices liability, and cyber liability
It is different from a regular insurance policy in several ways.
This means that the policyholder may not have access to the same consumer protections or state guaranty funds as a regular policyholder.
Second, an RRG policy is not subject to the same rating and filing requirements as a regular policy.
This means that the RRG can set its rates and terms without state approval or oversight.
Third, an RRG policy is owned by the policyholder, who also shares in the profits and losses of the RRG.
This means that the policyholder has more control and influence over the RRG’s operations and claims handling
Eagle Builders Insurance Company
Eagle Builders Insurance Company Risk Retention Group Inc (EBIC) is a liability insurance company that provides coverage to commercial construction businesses
EBIC is a risk retention group, which means that it is owned by its policyholders and operates under state and federal laws
EBIC was formed in 2015 and is domiciled in North Carolina. It is registered to do business in 49 states and the District of Columbia.
It offers general liability, builders risk, and excess liability coverages to its member
EBIC’s mission is to provide stable, affordable, and customized liability insurance solutions to its members
EBIC’s benefits
- Program control:
Members have a voice in the governance and management of the RRG
- Long-term rate stability:
shareholders enjoy consistent and competitive rates that reflect their loss experience and risk profile
- Customized loss control and risk management practices:
Members receive tailored risk assessment and mitigation services, as well as safety training and education programs
- Dividends for good loss experience
shareholders receive dividends based on the RRG’s profitability and surplus, which can lower their net cost of insurance.
- Access to reinsurance markets:
Members benefit from the RRG’s ability to purchase reinsurance from financially sound reinsurers
- Stable source of liability coverage at affordable rates:
Members can rely on the RRG to provide them with adequate and comprehensive liability coverage that meets their specific needs
Conclusion
Eagle Builders Insurance Company Risk Retention Group, Inc. is a liability insurance company that provides coverage to commercial construction businesses
It is a risk retention group, which is a type of captive insurance company that operates under state and federal laws.
RRGs are different from other captives and regular insurance companies in several ways
RRGs offer many benefits to their members, such as program control, rate stability dividends, and access to reinsurance.
EBIC is a leading RRG in the construction industry, offering general liability, builders risk, and excess liability coverages to its members
EBIC’s mission is to provide stable, affordable, and customized liability insurance solutions to its members,
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