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Policy Terms & Limits

Self-Insured Retention (SIR)

Also known as: SIR

An amount the insured must pay on a claim before coverage and the insurer's duty to defend kick in, similar to but distinct from a deductible.

A self-insured retention is a layer the policyholder retains before the policy responds. The key difference from a deductible is that with an SIR the insured typically handles and pays claims within the retention themselves, including defense, before the carrier steps in.

Large SIRs on a sub's policy can be a concern for GCs, because additional insured protection may not function until the sub satisfies the retention, something a thinly capitalized sub might struggle to do.

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