Self-Insured Retention

FOR MOTOR CARRIERS WHO WANT

A GREATER ROLE IN YOUR INSURANCE

A self-insured retention, sometimes called a SIR, is a premium-reducing tool you can leverage as part of your trucking company’s insurance program.

In a nutshell, retention is a dollar amount that your company agrees to pay before your insurance policy responds. If your trucking company focuses on loss prevention and has a safety culture in place, you may be a great candidate for this premium-reducing tool.

At Great West, we offer self-insured retentions to financially stable motor carriers who want more “skin in the game.”

HOW DOES A GREAT WEST

SELF-INSURED RETENTION WORK?

A self-insured retention is a contractual agreement between your trucking company and Great West where your company agrees to pay up to a set dollar limit — say $25,000 — of each claim before your insurance policy responds. The retention amount can be customized to suit your business’s needs. The contract itemizes how the cost of claims is divided and defines how claims are handled by both your team and Great West.

We’ve found the option of splitting claims responsibility is a way for trucking companies, especially those that are new to self-insured retentions, to monitor their loss-related expenses.

THE BEST CANDIDATES FOR A

A self-insured retention can be a great fit if you’re a motor carrier that would like to reduce your overall insurance cost and take a greater role in managing and funding your risk.

Self-insured retentions are not ideal for all motor carriers. Trucking companies that choose retention are counting on their premium savings outweighing the costs of the losses they’ll fund. That typically means risk-averse companies are not good candidates.

Self-insured retentions, though, can provide a financial advantage to risk-tolerant motor carriers that can meet specific qualifications.

QUALIFICATIONS FOR A SELF-INSURED RETENTION

The team at Great West will help you evaluate a number of factors that can guide your decision to employ self-insured retention. These include the size of your trucking company, your safety program, your financial condition, your loss history, and your risk tolerance. These will help assess your company’s ability to administer and fund the retention you select without creating a significant drain on your bottom line.

Guidelines for companies considering an SIR

SIZE: You have more than 40 revenue-generating units, a stable financial standing, and staff capacity to manage claims

SAFETY: You have a safety director and a safety culture in place that promotes the safe operations of the truck line

FINANCES: You can handle the costs of a loss, premiums, and deposits, in addition to an opening collateral requirement

LOSS CONTROL: You have a focus on loss reduction and a history of controlling the frequency and severity of claims

RISK TOLERANCE: Your company is willing to accept a higher threshold for risk

INSURANCE HISTORY: The type of insurance program your company has previously had, and how long you’ve been with Great West or your current carrier

These guidelines will provide a picture of your trucking company’s ability to retain losses and your potential to reduce your overall insurance cost using self-insured retention.