Self-protection

Definition

Self-protection refers to steps taken by an individual, household, firm or other party to reduce the probability of occurrence (or probability of occurrence at a given level of severity) of some adverse event.

It is similar to, but somewhat different from, insurance, which involves a contract with another party that reduces the private cost that results from the adverse event, by shifting part of the cost to the other party.

Note that insurance against one adverse event can function as self-protection against an adverse event that could occur as a result of the first adverse event.