Self insurance is a risk management method in which a calculated amount of money is set aside to compensate for the potential future loss. More colloquially, the term “self-insured” is used as a euphemism for uninsured.[1]
If self insurance is approached as a serious risk management technique, money is set aside using actuarial and insurance information and the law of large numbers so that the amount set aside (similar to an insurance premium) is enough to cover the future uncertain loss. Continue reading ‘Self insurance’
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