Self-Insurance & Alternative Risk Finance Mechanisms

Self-Insurance refers to an individual’s or business’ insurance of themselves or their interests by maintaining a fund to cover possible losses, rather than by purchasing an insurance policy. Alternative Risk Finance Mechanisms are used as an alternative to commercial insurance and are legal entities that assume the liability to pay future losses.



  • Assist clients in obtaining self-insurance qualification on an individual basis
  • Assist groups of entities to qualify for group workers’ compensation self-insurance, including:
    • Drafting the necessary trust documents and by-laws
    • Helping to complete the application
    • Appearing before the Maryland Insurance Administration with regard to the application
    • Providing ongoing counsel to the group to help meets its continued qualification requirements (e.g. filings) and to assist with other issues which may arise

Alternative Risk Finance Mechanisms:

  • Helping to create insurance captives, including negotiating and drafting related “treaties” with the insurer fronting the requisite “paper”
  • Assisting both insurers and insureds in negotiating and drafting other types of self-insurance mechanisms, including:
    • Deductibles
    • Self-insured retentions
    • Loss corridors, etc.
  • Assisting in the negotiation and drafting of important instruments relating to collateralization, in order to minimize the amount of assets which will be committed during the process of tailing out claims.
  • Assisting clients with a variety of risk finance mechanisms, including loss portfolio transfers

Firm Qualifications

Franklin & Prokopik attorneys are experienced in matters related to self-insurance and other alternative risk finance mechanisms.