What is an SIR?

A SIR is a self insured retention and it’s something that shows up in builder’s and subcontractor’s insurance policies, but primarily in the builder’s policies. A self insured retention is like a deductible except that the builder has to pay it first before the insurance kicks in. The significance of a self insured retention or SIR is that builders are often willing to pay up to the amount of their SIR in repairs because they know they’re going to have to pay the money anyway. Once they reach their SIR typically they’re not going to preform other significant repairs because they want their insurance company to step up and make any further payments. SIR’s can be as little as $25,000 but we’ve seen them as much as $100,00 or even half a million dollars.