2 Reasons Why Risk Retention May Benefit Your Business

Risk Retention

2 Reasons Why Risk Retention May Benefit Your Business

If you own or run a business, you know the daily risks associated with daily transactions or operations. Most companies transfer that risk to an insurance company to alleviate potential fallout, yet sometimes business owners choose to retain them. Here are two risk retention examples of how they may benefit you.

1. High Premiums

Sometimes insurance coverage can get expensive, especially when you have multiple policies and plans. For this reason, sometimes, business owners will retain risk if the loss is less than paying for insurance coverage. For example, while vandalism and theft are never pleasant, these losses may be more affordable to correct out of pocket instead of paying high monthly or annual insurance premiums.

2. Inability to Find Appropriate Coverage

Forced risk retention involves making the decision to forgo coverage and retain risks due to them being uninsurable or uncovered by policy deductibles. The inability to find adequate coverage is another example of why risk retention is beneficial to business operations.

Choosing to retain potential risks isn’t one to take lightly, but one that may ultimately benefit your company’s overall success. Suppose you can pay for losses out of pocket or budget for more predictable ones. In that case, you may benefit from waiving insurance protection and researching risk retention group options.

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