Self Insured Retentions Definition & Meaning | Insurance Term | CSIMarket
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Glossary

Self Insured Retentions

Insurance Term

Self Insured Retention (SIR) is a type of deductible used in insurance where the policyholder takes on a portion of the risk in exchange for reduced premiums. The SIR specifies the amount of money the policyholder is responsible for paying before the insurer begins to pay for a covered loss.

For example, if the policy has a $10,000 SIR and a loss of $50,000 occurs, the policyholder pays the first $10,000 and the insurer pays the remaining $40,000.

SIRs are typically used in commercial insurance for businesses, where the risk of loss is higher and the policyholder may have more control over claims management. It is a way for businesses to manage risk and reduce insurance costs.

SIRs can be structured in several ways, including periodic payments or lump-sum payments. They may also apply on a per-occurrence or aggregate basis.

Overall, SIRs are a common risk management tool used in the insurance industry to help businesses and organizations mitigate risk and protect their assets.


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