SELFINSURANCE Meaning and
Definition
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Self-insurance is a concept where an individual or organization assumes the risk of financial loss without transferring it to an external insurance provider. It involves setting aside a fund or reserve to cover potential losses or claims that may arise in the future. In essence, self-insurance is a form of risk retention strategy.
Self-insurance can be employed for various types of risks, including property damage, liability exposure, or medical expenses. By opting for self-insurance, the insured takes on the responsibility of managing and funding potential losses directly, rather than relying on an insurance company to cover them.
To establish self-insurance, individuals or organizations typically create a reserve fund that is carefully managed and invested to ensure it remains sufficient to cover any future losses. The decision to self-insure depends on factors such as the size of the entity, the level of financial stability, and the tolerance for assuming and managing risks.
One of the main advantages of self-insurance is the potential cost savings. By eliminating the administrative overhead and profit margins associated with traditional insurance policies, individuals or organizations can reduce insurance expenses. However, self-insurance comes with inherent risk, as it exposes the insured to potential losses that may exceed the amount set aside in the reserve fund.
Common Misspellings for SELFINSURANCE
- aelfinsurance
- zelfinsurance
- xelfinsurance
- delfinsurance
- eelfinsurance
- welfinsurance
- swlfinsurance
- sslfinsurance
- sdlfinsurance
- srlfinsurance
- s4lfinsurance
- s3lfinsurance
- sekfinsurance
- sepfinsurance
- seofinsurance
- seldinsurance
- selcinsurance
- selvinsurance
- selginsurance
- seltinsurance
Etymology of SELFINSURANCE
The word "selfinsurance" is a compound of two terms: "self" and "insurance".
The term "self" can be traced back to the Old English word "self", which means "one's own person, alone, or supernatural". It has its roots in the Proto-Germanic word "*selbaz", meaning "self" or "person". The word has further connections to the Old Norse word "sjalfr" and the Gothic word "silba", both also meaning "self".
The word "insurance" has a Latin origin. It comes from the Latin word "securus", meaning "safe" or "secure". This Latin word was later adopted into Old French as "asseürance", which referred to a guarantee or protection against loss or harm. Eventually, the term evolved into the English word "insurance", retaining its original meaning.
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