Which term describes the act of a business retaining control over its own risks, opting not to insure?

The term that best describes the act of a business retaining control over its own risks, opting not to insure, is self-insurance. This approach involves a business setting aside funds to cover potential losses instead of transferring that risk to an insurance company. By using self-insurance, a business manages its own risks and retains any losses it experiences, often leading to cost savings if the actual losses are lower than the premiums that would have been paid for insurance.

Self-insurance can be particularly appropriate for businesses with predictable loss patterns or sufficient financial resources to cover potential losses. This method often implies greater control over risk management practices, as the business can tailor its retention strategies based on its specific risk profile.

Other terms in the question, such as partial self-insurance, risk retention, and risk avoidance, describe different concepts in risk management. For instance, partial self-insurance combines elements of both self-insurance and traditional insurance, where a business retains some risk while securing coverage for larger exposures. Risk retention refers to the broader practice of accepting risk rather than transferring it but doesn't specifically connote the organized set-aside of funds that defines self-insurance. Risk avoidance, on the other hand, means eliminating the risk altogether, which is different from simply choosing not