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Self-Insured Retention vs. Deductible: What It Means When a Sub's COI Shows an SIR

By SubCover HQ · Updated Nov 3, 2026 · 2 min read

Sometimes a sub's certificate, or the policy behind it, shows a self-insured retention (SIR), usually on an umbrella or on larger general liability programs. It's easy to treat an SIR like a deductible. They aren't the same, and the difference can matter when you're the additional insured.

How a deductible works

With a typical liability deductible, the insurer handles the claim from the start, defends it, and pays the covered loss. It then collects the deductible amount back from the insured. The limit is usually reduced by the deductible, depending on the policy.

How a self-insured retention works

With an SIR, the insured itself must pay losses, and often defense costs, up to the retention amount before the policy responds at all. The insurer's obligations generally begin only after the retention is satisfied, and the limit typically sits on top of the retention. Policy wording varies a lot, including who can satisfy the retention.

Why it matters to you as additional insured

• If the sub can't or won't pay the retention, some policies don't respond until someone pays it. A small sub with a large SIR is a real risk.
• Defense may not start right away. You may need to defend yourself until the retention is used up.
• Some SIR wording requires the named insured to pay it, so you might not even be able to pay it yourself to reach the coverage.

Where to look

On the ACORD 25, umbrella and excess lines include a "Ded" and "Retention" area. General liability SIRs are less often shown, so it's fair to ask the agent directly whether any policy carries a self-insured retention or a deductible over a set amount.

What to put in your requirements

1. Require disclosure of any deductible or self-insured retention over a set amount, such as $25,000.
2. Require that any SIR can be satisfied by the insurer or by you, not only by the named insured, or don't accept SIRs above a threshold.
3. Have the agent confirm the SIR amount and terms in writing, and keep that with the certificate.

Our insurance requirements generator and subcontract insurance clause guide help you write these terms in.

Key takeaways

A deductible is paid back to the insurer after the claim; a self-insured retention must be paid before the insurer steps in. Ask about SIRs, cap them in your contracts, and know who's allowed to satisfy them. SubCover HQ reviews every certificate against your requirements and flags what needs an agent's answer, for $99/month.

Frequently asked questions

What is the difference between an SIR and a deductible?

With a deductible, the insurer pays and defends from the start and collects the deductible back. With a self-insured retention, the insured pays losses up to the retention before the policy responds.

Why does a self-insured retention matter to an additional insured?

If the named insured can't or won't pay the retention, the policy may not respond, and defense may not start right away.

Where does a COI show a self-insured retention?

Umbrella and excess lines on the ACORD 25 have deductible and retention boxes. For general liability, ask the agent directly.

This guide is general information, not insurance or legal advice. Policy terms vary widely; your insurance professional and attorney determine what you should accept.