Large Deductible Policy Definition & Meaning | Insurance Term | CSIMarket
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Glossary

Large Deductible Policy

Insurance Term

A Large Deductible Policy is a type of insurance policy where a business assumes a significant portion of the financial risk of an insurance claim by agreeing to pay a high deductible. The deductible is the amount of money that the policyholder must pay out-of-pocket before the insurance company pays for covered losses.

Large Deductible Policies are usually used in commercial insurance and workers* compensation insurance. By accepting a higher deductible, the policyholder can typically enjoy lower premiums, which can help reduce the overall cost of coverage.

In a Large Deductible Policy, the policyholder agrees to pay a predetermined deductible amount for each claim, up to a certain maximum. Once the deductible is reached, the insurance company pays the remaining amount of the loss, up to the policy limits.

This type of policy is often used by larger businesses that can afford to accept a higher level of financial risk, and it is particularly useful for businesses with a good safety record. By accepting a higher deductible, the policyholder has an incentive to minimize losses and implement risk management strategies to prevent future claims.

Overall, Large Deductible Policies can be an effective way for businesses to control their insurance costs while maintaining adequate coverage for potential losses.


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