Insurance Pool
What Does Insurance Pool Mean?
An insurance pool is an alliance of insurance companies formed for a specific business endeavor, typically when a financial risk is too great for a single company to handle alone and can only be managed through shared resources.
Insuranceopedia Explains Insurance Pool
When a financial risk is too high or potentially catastrophic for one company to manage alone, multiple companies can form an insurance pool, combining their resources as a risk management strategy.
For example, companies might create an insurance pool to offer earthquake insurance in areas prone to earthquakes or to provide coverage for individuals with serious medical conditions.
Businesses also have the option to establish their insurance pools rather than relying on insurance companies to meet their coverage needs. By doing so, they create a self-sustaining insurance community with custom insurance programs that may be more affordable and sustainable than those offered by traditional insurance providers.
