Ace the AAMI Small Biz Management Test 2026 – Empower Your Entrepreneurial Spirit!

Self-insurance means retaining risk and funding potential losses with internal resources rather than buying external insurance. Saving to have money to cover possible future losses reflects this approach, where a business sets aside funds to pay for claims or losses as they occur. It’s different from transferring risk to an insurer, paying premiums for coverage, or pooling risk with a third party. Self-insurance relies on having adequate reserves and a plan to cover expected and unexpected losses from within the business.