On the Self-Insurer's Annual Report, future liabilities are estimated as?

• A. Paid to date
• B. Total Reserves less paid to date
• C. Incurred less paid to date
• D. The probable total future cost of compensation for the injury or disease

Answer: (D)

In self-insurance, the amount reported for future liabilities represents the ultimate, total cost expected to settle all claims arising from injuries or diseases, including those not yet reported. This reflects the full burden the insurer anticipates, not just what has already been paid or what remains unpaid at a given moment. It includes both indemnity and medical costs and accounts for claims that will be incurred in the future, as well as those currently outstanding.

Paid to date only captures cash outlays already made; it misses future obligations. Incurred less paid to date shows only the portion of costs that have been incurred but not yet paid, not the total future cost of all claims. Total reserves less paid to date reflects remaining reserved amounts, which is related but does not express the full probable future cost of all injuries and diseases.

Therefore, the best description of future liabilities is the probable total future cost of compensation for the injury or disease.