Risk retention groups provide coverage for which type of risks?

Risk retention groups are organizations formed to provide liability insurance to their members, who share similar risks. The primary focus of risk retention groups is to cover liability risks arising from the common activities of their members, which can include professional malpractice, general liability, product liability, and other forms of liability insurance.

The reason the chosen answer is correct lies in the nature of these groups. They operate under the Liability Risk Retention Act of 1986, which allows them to pool together resources to better manage and underwrite risks associated with their specific field or profession. These groups are particularly beneficial in situations where traditional insurance markets may not provide adequate coverage or may impose very high premiums.

While risk retention groups can provide coverage for a variety of liability risks, they do not cover workers' compensation. Workers' compensation insurance has specific regulatory requirements and is typically provided separately from such groups. Consequently, the other options, which suggest limited coverage to either health insurance, property risks, or solely workers' compensation, do not accurately reflect the broader scope of liability risks covered by risk retention groups.