DIY cover can trim costs

SELF insurance is looming as a possible alternative for companies looking to reduce their insurance premiums, however, it is an option that needs careful planning to be implemented successfully.

Burswood Resort Casino managing director John Schaap said self insurance had helped the casino reduce its insurance costs.

“Organisations such as ours have very focused risk management programs in a number of areas and this has enabled us to self-insure,” Mr Schaap said.

“But for this to work you have to have a program in place to mitigate the risk. Then you build a small fund each year to cover that risk.

“You bring that fund back to your profit and loss statement at the end of each year.”

Insurance brokers contacted by WA Business News said self insurance was a viable option but one that was not suitable for all businesses.

The key to it working successfully was to have good risk management programs in place and sufficient cash to cover any risks that are not mitigated by the risk management, they said.