Harold owns several gas stations. He realizes that among the several risks associated with this type of business is the risk of minor damage to cars from dirty or contaminated fuel. He also knows that there is a small chance of a major loss if a fire occurred at one of his gas stations. Harold wants to control his insurance costs while still maintaining a reasonable risk management program. He is considering self-insurance. If he decides to use this approach, he will probably:

Question

Quizplus · Accepted Answer

Self-insurance can be a cost-effective way to manage minor losses, such as damage from dirty or contaminated fuel, while still seeking coverage from an insurance company for potentially major losses, such as from a fire. By self-insuring for smaller, routine losses, Harold can control his insurance costs and reduce the likelihood of costly insurance claims. However, it is still important for Harold to carefully assess and manage all risks associated with his gas stations, and to have a comprehensive risk management plan in place to ensure the ongoing success and profitability of his business.

Harold Owns Several Gas Stations