A self-insured retention (sometimes abbreviated as "SIR") is a potential loss assumed by an organization--that is, not insured. The SIR differs from a deductible because the insured performs all the functions normally undertaken by an insurance company for losses within the SIR, including claims adjusting and audits, funding and paying claims, and complying with applicable state and federal laws and regulations.
A deductible on the other hand is the amount of an insured loss for which the insured is financially responsible before an insurance policy provides coverage.
from Rupp's Insurance & Risk Management Glossary. 2002, NILS Publishing. All rights reserved.
What are self insured retentions "SIR's"?
