Which of the following best describes self-insurance?

Question

Quizplus · Accepted Answer

Self-insurance involves actively setting aside money to fund any losses should they occur, rather than purchasing insurance from a third-party insurer. This can be done by businesses or individuals who want to take on a higher degree of risk and have enough financial resources to cover potential losses. Option B, using precautionary savings to purchase insurance, is not a description of self-insurance but rather traditional insurance. Option C, diversifying activities to minimize risk, is a risk management strategy but is not specific to self-insurance.

Which of the Following Best Describes Self-Insurance