basket deductible
A basket deductible is a single retained limit designed to fund losses from
multiple risks. For example, property and general liability represent entirely
different loss exposures. The traditional (and still most prevalent) method
of allocating these risk between retention (deductible) and transfer (insurance)
is through individual risk silos wherein each risk is evaluated separately without
regard for the other. A basket deductible combines the risk profiles of each
exposure into one retained amount. Theoretically, since the risks are totally
different, they tend to offset each other, requiring less funding. Put another
way, the whole is less than the sum of its parts.