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What is Enterprise Risk Management?

Enterprise Risk Management (ERM):

The discipline by which an organization in any industry assesses, controls, exploits, finances and monitors risks from all sources for the purpose of increasing the organization’s short and long-term value to its stakeholders. Successful ERM programs manage risk across two dimensions: Time & Space.

Time:

Properly developed ERM programs shift your Risk Management focus from short-term (once-a-year when traditional insurances policies renew) to a long-term program designed with the organization’s overall goals in mind.

Space:

ERM programs increase the Depth of Coverage of an organization, allowing for formal insurance across the three distinct areas of risk: Core, Operational and Strategic.

 

Why Combine Enterprise Risk Management With A Captive Insurance Company?

Stronger Business Model Stronger Business Model

Stronger Business Model

Stronger Business Model Stronger Business Model

Asset Protection

Stronger Business Model Stronger Business Model

Improved Risk Management

Stronger Business Model Stronger Business Model

Insurance Profits

Stronger Business Model Stronger Business Model

Advantageous Tax Treatment

Stronger Business Model Stronger Business Model

Wealth Accumulation

Stronger Business Model Stronger Business Model

Improved Cost Control

Enterprise Risk Management & Captive Insurance Companies

Their combination benefits everyone!

Small and mid-market businesses are fragile.
Unlike their Fortune 1,000 brethren, they:

• Lack access to credit and capital markets
• Are geographically concentrated
• Have concentrated revenue streams

Which contributes to the fact that:
40% of small businesses affected by natural or human-caused disaster never reopen their doors.*

-And-

1/2 of those that do reopen don’t survive past the second year post disaster.*

*Source: Small Business Administration

Small and mid-market businesses are fragile.
Unlike their Fortune 1,000 brethren, they:

• Lack access to credit and capital markets
• Are geographically concentrated
• Have concentrated revenue streams

Which contributes to the fact that:
40% of small businesses affected by natural or human-caused disaster never reopen their doors.*

-And-

1/2 of those that do reopen don’t survive past the second year post disaster.*

*Source: Small Business Administration

Risk:

The potential for future losses or shortfalls due to the deviation of actual results from expected results.

Even the U.S. Government encourages small and mid-size businesses to prepare for a wide range of threats. Below is a chart which outlines potential risks and impacts of those risks.

(Chart from Ready.gov landing page for businesses as of March 2015).

Core Risk

  • General Liability
  • Auto Liability
  • Directors & Officers
  • Property Liability
  • Professional Liability
  • E & O
  • Worker’s Compensation

Operational Risk

  • Administrative Actions
  • Cyber Risk
  • Employment Practices
  • Litigation Defense Expense
  • Business Risk Indemnity
  • Legal Expenses
  • Commercial Crime
  • Excess General Liability
  • Excess Prof. Liability
  • Existing Deductibles

Strategic Risk

  • Business Interruption
  • Contract Termination
  • Subcontractor Default
  • Reputational Damages
  • Terrorism
  • Supply Chain Interruption
  • Regulatory & Legislative Changes

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