A technique of risk management where an individual or business assumes expected losses that are not catastrophic, protecting against catastrophic losses through insurance.
A captive insurance company is a subsidiary company formed to insure the risks of its parent company or a group of companies. This structure allows the parent company to manage and tailor its own risk management strategy, potentially leading to cost savings and more comprehensive coverage.
Risk retention is a method of self-insurance where an organization retains a reserve fund to offset unexpected financial claims. It involves setting aside funds to handle potential future losses and can be an effective risk management strategy under certain conditions.
Self-insurance refers to the process of protecting against loss by setting aside one's own money rather than purchasing insurance from a third party. This can be systematically done by establishing a reserve fund.
