4 ms·
Surely not. A company the size of Amazon/UPS doesn't need to pay someone else to shoulder the risk of them losing $500 now and again. But it must be factored in
by gmac 14y ago
Surely not. A company the size of Amazon/UPS doesn't need to pay someone else to shoulder the risk of them losing $500 now and again. But it must be factored into their margins.
- mseebach 14y agoWell, yes and no :) Even when you're self-insured (which is what you are when you've got risk factored into your margins), you're still insured.
- nwienert 14y agoThat's a ridiculous twist of words. That's not self-insured, it's just planning for loss, which is exactly what it's called (Unplanned expenditures).
- mseebach 14y agoNo it's not. If you book it under "Unplanned expenditures" then you're not insured. If you try to determine your risk in such a way that you can budget a fixed sum for coverage and reasonably expect not to exceed it (ie. not an unplanned expenditure) in the same way an insurance company would do it, they you're insured.
- nwienert 14y agoIt's literally a line item in the budget for unplanned expenditures. Sounds ridiculous, but you are planning for the unplanned. I'm just saying calling that "insurance" dilutes the meaning of what insurance actually is, which requires a transaction between two separate companies.