Self insurance is an example of what type of risk management

Self-insurance is a risk retention mechanism in which, rather than contractually transferring risk to a third party as it would in a traditional commercial insurance arrangement, a company sets aside money to fund future losses.

What type of risk is self-insurance?

Self-insure is a risk management technique in which a company or individual sets aside a pool of money to be used to remedy an unexpected loss.

What is an example of self-insurance?

In the United States, self-insurance applies especially to health insurance and may involve, for example, an employer providing certain benefits—like health benefits or disability benefits—to employees and funding claims from a specified pool of assets rather than through an insurance company.

What is meant by self-insured?

Being self-insured means that rather than paying an insurance company to pay medical, dental and vision claims, we pay the claims ourselves, using a third-party administrator to process the claims on our behalf.

What is self-insurance and what are the distinct types of self-insurance?

Self-insurance is a general term used to describe funding that has been set aside for future losses. Among its meanings, self-insurance could refer to a simple loss fund, a savings account, or even a rainy-day fund.