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QUESTION
A large retailer is considering self insuring it's s small GL claims. Here is relevant data: Avg GL total losses below $10k - $2.5m Total GL losses...
A large retailer is considering self insuring it's s small GL claims. Here is relevant data:
- Avg GL total losses below $10k - $2.5m
- Total GL losses in recent years range from $3.0m to $5.0m
- Current fully insured GL premium $9.0m
- Management interest in a trial program of offering gift certificates to customers who have suffered minor injuries at their stores
- Management intention - if they become a self insurer of losses - to have each store pay its own losses up to the $10k self insured limit
- Projected GL Premium excess of a $10k SIR or deductible - $ 3.5m
Would you self insure the first $10K of GL claims? What are the benefits (at least 2)? What are the risks (at least 2)?
