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Self-insurance is a financial strategy that involves setting aside funds to cover potential losses instead of purchasing traditional insurance. There are various mechanisms used to fund self-insurance, such as captives and risk-retention groups. Captives are insurers owned by non-insurers to provide coverage to their owners. On the other hand, risk-retention groups are formed by members of similar professions or businesses to obtain liability insurance. These self-insurance methods allow individuals and organizations to have more control over their insurance costs and potentially save money in the long run.
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