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What is the Difference Between
Self-insured and Uninsured?
Self insured provides protection against loss by setting
aside money for high frequency and low-severity type losses. An individual
self-insured business or self-insured group is an organization that retains
and finances a portion of its risk based upon sound actuarial expected
loss projections. Severity losses are transferred to a commercial insurer
or captive.
An uninsured risk is a term used to described
the failure to purchase insurance or self-insure on the basis of sound
actuarial expected loss projections. A business or public entity that
pays for losses on a "pay as you go" basis is uninsured.
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