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Someone at work is inquiring about consumer warranties on iPads, which are becoming more and more common in the meeting rooms. Our CIO even said he used a third party service plan for a decade at his last firm. This got me thinking; I self-insure my consumer electronics, so why would a firm with a much larger bankroll elect to buy insurance from third parties?

jldugger
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  • Seems weird for a large firm to do this. At any sort of scale, you're better off just planning to replace occasional losses - acting as your own insurer, in essence, and pocketing the margin they'd have taken. – ceejayoz Nov 07 '11 at 21:20

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I'd guess that it may be related to warranty prices being static regardless of how many returns or repairs you call in, whereas insurance premiums can go up if you have a lot of claims.

There's also the possibility of a bulk loss through disaster, you can't recover via warranty, but you need to claim those on your insurance.

All of our equipment at my last position was covered under business insurance, and the production equipment had warranties on it so it could be replaced.

Does this answer the question you asked?

Matt Simmons
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