Savings on its insurance bills are being sought by South Kesteven District Council.
SKDC is to take a lead in working with other councils to form an organisation to offer insurance services to its members.
All members of cabinet agreed the move last Thursday, saying this will also raise the profile of the pioneering council nationally.
Council leader Matthew Lee told members the Local Government Association and other councils believed a need existed for more competition in the insurance market and the local authority partners could come together and develop an insurance product.
SKDC has been approached to become a founding member of a mutual organisation to offer insurance services. Only when it needed to review its insurance would SKDC decide whether to use its services.
Council chairman Bob Sampson said when he worked as an architect, his firm was part of a mutual society, which went from strength to strength.
His offer to help CllrLee was welcomed, with the leader saying setting up a mutual group would not be easy.
Mr Lee said: “The local government insurance market is well-established. The mutual has the potential to cause a considerable amount of disruption in that area.”
More competition would hopefully lower SKDC’s insurance costs, but its liability in joining the mutual would be limited to £100. Being a founder member would also raise the profile of SKDC.
Deputy leader Kelham Cooke said: “I think this is a great opportunity for us not just to shake the market but to raise the profile of SKDC. It’s really good that we are getting out there and starting to shape the national picture.”