Successful entrepreneurs have the ability to seize upon opportunity, navigate around the perils of doing business and adapt to changing business landscapes. The road to success requires hard work and strategic planning. Risk mitigation should be an integral part of a viable long-term strategy.
Exposure to low-frequency risk is a reality for most business enterprises. When losses do occur, the resulting adverse financial impact tends to be severe. Typically, these are the most difficult exposures to place in traditional insurance programs, providing the impetus for the creation of an Oxford private insurance solution.
There are many examples of the kinds of enterprise risks faced by successful business owners. Perhaps the firm is exposed to significant loss due to the loss of a key customer or key employee, or is exposed to financial losses from trade credit, transit risks or contract cancellation? The risk management opportunities are nearly endless.
The team ultimately tasked with evaluation of these and other exposures must be knowledgeable about all aspects of the organization’s operations, as well as the business and regulatory environments in which they work.
The Oxford team will review the policy with the insured, their property and casualty insurance agent or other advisor. The insured will then work with their team to select the most important coverages which both supplement and complement their existing property and casualty program–providing effective management of their self-insured enterprise risks within their own Oxford alternative risk management solution. Policy features, coverage and limits are strategically tailored to meet each organization’s specific enterprise exposures.
Generally, premiums paid by operating companies to traditional property and casualty insurance carriers are deductible as ordinary and necessary business expenses. Likewise, premiums paid to captive insurance arrangements are typically deductible. Nevertheless, business owners should consult with independent tax advisors to determine whether premiums would be deductible in a specific case.
Over time, as the captive matures and develops potentially significant balance sheet assets, its owners will consult with their independent financial advisors to identify additional financial opportunities.
The decision to transfer or retain risk is a financial decision with significant business purpose and potential financial advantages. A private insurance program can be one of the most powerful and important chess pieces available to successful business owners and their families.