stacks of coins and pens on insurance form. learn about self-insurance with robert harder consulting inc.

Self-Insurance – what is it?

“Oh, we will just self-insure that” NO, you don’t just simply “self-insure”.

Self insurance is not the same is ignoring insurance as a loss funding mechanism for losses.

Self-insurance is a deliberate, planned and specific mechanism. An uninsured risk is not self-insured.

Creating a captive insurance company is self-insurance, but a large deductible is not.

Terminology gets murky, but a large self-insured retention is considered self-insurance.

Insurance is the spreading of risk using the law of large numbers to share losses with others, administered by an insurance company.

Tax laws allow insurance companies to expense a possible future claim payment as a reserve. Businesses cannot expense reserves, possible future claims, against current income, even with a self-insured retention, large deductible, or the absence of insurance. any exceptions are beyond the scope of this forum.