An interesting discussion on risk. Here's another consideration, you can self-insure to an extent by changing processes to minimize risks. If you must charge $1

An interesting discussion on risk. Here's another consideration, you can self-insure to an extent by changing processes to minimize risks. If you must charge $10 to wash a Ferrari because your risk model says that it will cost you $5 in mistakes, use a different process to lower mistakes. Let's say that instead of the standard wash process you use for regular cars, you take extra time on the Ferrari, using your best washers and new materials. Now, the risk goes down from 1 in 2,000, your risk is 1 in 10,000. Now you can charge more for the special, risk-averse treatment and only a $1 risk surcharge on top of that. Effective risk management doesn't just mean that you protect yourself against "bad things". The ability to manage risks better than your competitors is a competitive advantage. I heard it best described as the brakes on a sports car. Good brakes let you take corners faster.