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Should you self-insure your business? Consider these points

Insurance premiums for your business can be a crushing expense, which is why many smaller businesses decide to shoulder their own risk and self-insure. The cost and control that self-insurance offers can be attractive.

But self-insurance isn't for every business. Any kind of risk retention comes with potential problems. Most typically, the problem with self-insurance comes along when a company gets sidelined with costs they didn't expect. For example, you may never have had any real property damage at your business, so you might pick a pretty high deductible just to reduce your insurance costs. If you suddenly experience a loss that doesn't meet that deductible, your savings could be more than wiped out.

Another benefit of self-insurance is that you can pick and choose the benefit package your employees have -- including things like co-pays and deductibles. For a lot of companies, the problem comes in when the employees discover that their insurance isn't as generous as they thought. That can give you a reputation as a "bad employer" and drive away good talent.

If you're thinking about self-insuring your business, consider investing in experienced legal assistance. Our team understands how risk management works and can help you:

  • Determine the best way to balance your company's financial needs with the needs of your employees
  • Determine your goals for your business in any given insurance situation
  • Recognize the competitive needs of your business within its industry
  • Identify which plans are the ones that will help you avoid significant risk

We work with business owners in New York of all sizes and look forward to our partnerships.

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