Self-insurance requires

Question

Quizplus · Accepted Answer

Self-insurance involves setting aside funds to cover potential losses, rather than transferring the risk to an insurance company. Earmarking earnings for a contingency fund against future losses is a key aspect of self-insurance. Purchasing a high-deductible policy may reduce premiums, but it still involves transferring some risk to an insurance company. Implementing risk control methods can help to reduce the likelihood and severity of losses, but it does not eliminate the need for a contingency fund or self-insurance. Owning stock in an insurance company does not necessarily provide any benefits for self-insurance.

Self-Insurance Requires