A self-insured person or company is someone who chooses to forego third party insurance in favor of taking on the risk themselves. This can occur in a number of areas, from personal and business auto policies to home and life insurance. People may choose to self-insure in order to save money, although the financial ramifications of this decision should always be carefully considered.
For example, a homeowner that decides to self-insure in lieu of purchasing a traditional homeowners policy may be required by the lender to have substantial equity in the home in case of disaster. A business that foregoes employer health insurance in favor of a self-insured trust and pays its employees directly can save on insurance premiums, but the financial burden of the risk of loss falls squarely on the shoulders of the employers, who are also responsible for developing and implementing effective loss control programs.
The primary advantage of being a self-insured person or company is cost savings, particularly for larger businesses that can afford to take on the risk associated with their own workers’ compensation claims. However, the financial ramifications of this type of risk management are significant and should be carefully considered in light of the company’s financial situation, the nature and hazard of its employment, its experience, claims administration program, and other relevant factors.
Employers who are considering moving to a self-insured plan must calculate and project both the fixed costs of the program (such as administrative expenses, stop-loss premiums, and set fees) as well as the variable costs of the healthcare plan. The variable costs are dependent upon medical claim submissions and may include software administration fees, third-party administrator fees, and staff management fees. самоосигуряващо се лице или фирма