When deciding whether to self-insure, a risk manager should consider the opportunity cost of reserve funds and cash flow advantages.

Question

Quizplus · Accepted Answer

Considering the opportunity cost of reserve funds and cash flow advantages is crucial in determining whether to self-insure, as it involves analyzing the potential returns from investing reserve funds elsewhere versus the benefits of having immediate access to cash for claims.

When Deciding Whether to Self-Insure, a Risk Manager Should Consider