The portion of loss you agree to pay yourself before insurance covers the rest. Retaining some risk can lower your premiums while still providing protection.
What to consider
Know the amount you must pay out-of-pocket.
Ensure you can cover the retention in case of a claim.
Assess how this affects your overall financial risk.
Real world scenarios
A company opted for a self-insured retention, meaning it pays a set amount before insurance coverage kicks in.
An entrepreneur chose a plan with a high self-insured retention to lower premium costs.
A business used self-insured retention as part of its risk management strategy.