In an effort to minimize the cost of conventional property/casualty insurance, XYZ Electronics decided to manage their risk by self-insuring. The most likely way XYZ would try to do this would be to:
A) cover small and medium-sized losses itself, and carry conventional insurance only for catastrophic losses.
B) carry insurance for the small, routine losses and pay for any highly unusual major losses with its own funds.
C) buy an insurance policy that covers all risks.
D) establish a well-monitored loss-prevention program.

Question

Quizplus · Accepted Answer

By covering small and medium-sized losses itself, XYZ Electronics can save on premiums paid to conventional insurance companies. They can carry conventional insurance only for catastrophic losses, which are not typically covered by self-insurance. This way, the company can manage its risk effectively while still minimizing costs.

In an Effort to Minimize the Cost of Conventional Property/casualty