Can startups or smaller-sized companies effectively manage their risks through risk retention?

Companies should generate risk management plans for which they can follow a number of methods. One of these methods is risk retention, where the company pays for losses out of its own pocket. It is utilized when the insurance premiums have risen or the insurance company does not cover certain risks.

Large corporations and companies have a better means to retain their risks, due to greater access to resources. However, can start-ups and smaller companies say the same?

According to Insurance Business Canada, the Canadian insurance market has been hardening, and many organizations are considering higher retention of risks due to the increasing premiums. How can a smaller company compete with this trend, when they don't have the financial means to do so? What steps can they take to create the customized balance between risk retention and deals with insurance companies?

Answer rating: 100% (QA)

Smallersized companies and startups can effectively manage their risks through risk retention but it requires careful planning and strategic decisionm... View the full answer