Which of these is NOT a benefit of self-insured retention?

Self-insured retention (SIR) is a risk management tool that allows an organization to retain a portion of its risk rather than transferring it fully to an insurance carrier. One of the key characteristics of self-insured retention is that it does not provide immediate coverage for every occurrence. Instead, the insured entity is responsible for the losses that occur up to a certain retention limit before the insurance coverage kicks in.

Choosing the option indicating immediate insurance coverage for every occurrence highlights a fundamental misunderstanding of how self-insured retention operates. In an SIR arrangement, the insured must cover losses up to the specified retention amount before the insurance company becomes responsible for any additional claims. Therefore, there is typically a lag in coverage, as the insured entity must handle smaller claims and risks directly until the retention threshold is met.

In contrast, the other options accurately describe benefits associated with self-insured retention. Lower insurance premiums are common because organizations that opt for SIR can tailor their coverage needs and reflect their reduced risk exposure. Greater control over the risk management process allows organizations to manage claims directly and make decisions that align with their specific risk strategies. Finally, opting for self-insured retention often leads to higher deductibles since the organization is taking on more risk upfront, which can collectively