Self Insured Retention Deductible. According to a recent decision of the north carolina court of appeals in n.c. Although these two mechanisms are economically similar, they differ in significant respects and should not be used interchangeably.
Both sir and deductibles are used to keep premiums down. Deductibles and self insured retentions (sir’s) are mechanisms which require the insured to bare a portion of a loss otherwise covered by an insurance policy.
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Equally, the increase in bankruptcies will likely produce many debtors unable to pay their sir obligations. Factors determining the favorability and amount of an sir or deductible to an insured.
Self Insured Retention Deductible
The first is who is issuing your company “credit”.The use of these tools enables an insurer to shift the burden to pay for a portion of the claim to the insured.This feature can be used on many high cost business policies.This is similar to a large deductible except that the insurance company is not involved in handling any claims that occur under the retention or deductible level.
Thus, under a policy written with a sir provision, the insured (rather than the insurer) would pay defense and/or indemnity costs associated with a claim until the sir limit.When a claim needs to be paid out, it’s the insurance carrier that.While some view these terms as essentially being interchangeable due to their overall concept being similar, there are some key differences businesses should be aware of.With a deductible, it’s the insurance company.
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