What is one way an employer may self-insure Workers Compensation?

The correct answer highlights that an employer may engage in self-insurance for Workers' Compensation by collaborating with a group of similar private employers. This approach, known as a group self-insurance arrangement, allows employers to pool their resources and share the financial risks associated with Workers’ Compensation claims collectively. By doing so, each employer within the group can potentially reduce their costs related to premiums, benefit from shared administrative expenses, and enhance their ability to manage claims effectively. This arrangement can provide a safety net, as the pooled structure often yields better bargaining power and reduced volatility in claims costs versus operating independently.

In contrast, hiring an adjuster or purchasing a secondary policy are options that pertain more to traditional insurance strategies rather than self-insurance methods. Forming a lawsuit fund specifically addresses claims that may arise from legal actions rather than focusing on the core principles of self-insuring against Workers' Compensation liabilities. Thus, these other choices do not align with the concept of self-insuring in the context of Workers' Compensation as effectively as collaborating with similar employers does.