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Why Would You Expect Large Firms To Buy Less Insurance Than Small Firms?

All discussions relating to Business Insurance and Business Finance

Why Would You Expect Large Firms To Buy Less Insurance Than Small Firms?

Postby Walsh » Thu Oct 05, 2017 2:01 pm

Even just taking basic insurance into account - the larger firms have bigger premises, more employees, more vehicles etc. That's before you even get onto the business cover that they would need.
So normally, yes, a large firm would need more insurance cover than a small firm.
Walsh
 
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Why Would You Expect Large Firms To Buy Less Insurance Than Small Firms?

Postby Marcos » Sun Oct 08, 2017 3:19 am

Tricky - large firms will tend to have more complex needs and will need more types of insurance to cover them.

However large firms have substantial resources so can afford to lose larger amounts than small firms. This really should manifest as having a higher excess on the policy (the amount you pay yourself) rather than buying less insurance.
Marcos
 
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Why Would You Expect Large Firms To Buy Less Insurance Than Small Firms?

Postby Dafydd » Sun Oct 08, 2017 8:35 am

Large firms don't have less insurance.
Some of them choose to self-insure for say the first one million or even ten million to save on premium cost, but rest assured they have a lot of coverage above the self insured limit.
Being self insured means they pay the claims out of pocket until they reach their limit and then insurance takes over.
It is called a SIR self insured retention.
Dafydd
 
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