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.