Insurance alternatives that provide all the risk aversion and management help you need have been on the rise in just about every area, but many businesses still shop for workers’ compensation even after self-insuring in other ways. For many of them, self insurance for workers’ compensation is actually a viable option, and there are industry specialists who have programs built to help you get started.
There are some cases where self-insuring just does not work out for your workers’ compensation coverage, but that tends to only happen if the state mandates a monopolistic coverage option where everyone goes through a single program. In states with open markets, self-insuring is a viable way to minimize costs for your business.
How Self-Insuring Saves Money
When you pay for an outside insurance company’s service, you also pay for their profit margins and any excess administrative overhead beyond the efficient core needed to give you that service. By contrast, self insurance provides you with options that are calculated to provide the coverage you need without any excess administrative costs or additional profits. If you overpay and create a profit situation for your insurance setup, it’s the parent company re-absorbing its own money anyway, and that recapture makes a big difference to the bottom line of many businesses.