Much analysis goes into any company's decision about whether to self-insure or buy coverage, whether the insurance at issue is property, workers compensation, directors and officers or business interruption, and often there is no one right answer when choosing among self-insurance, a captive insurer or an outside underwriter. You have to wonder what they were thinking or not thinking, the folks in the risk management department at Massey Energy Co., owner of the Upper Big Branch Mine in West Virginia, where a huge methane gas explosion last month killed 29 miners and halted production at one of the big coal company's main production sites. They have to be kicking themselves over the decision, according to published reports, not to buy business interruption coverage this year.

Analysts say the explosion, at a mine that had received 53 safety violation citations in the month before the accident and 495 in the prior year, could end up costing the company as much as $50 million in lost production, according to Standard & Poor's. The rating agency recently placed Massey Energy's already low BB- rating on a downgrade watch.

What to insure, how to insure it and how much coverage is needed are some of the most important decisions a risk manager has to make. Yet, even though many of today's risk management departments originated as insurance departments, in the wake of 9/11, the Enron and WorldCom scandals and the advent of Sarbanes-Oxley compliance issues, they've expanded to deal with the broader area of enterprise risk management. Insurance, some experts say, can end up getting short shrift.