CASE STUDIES

SRA has made it possible for any successful business to take advantage of the same tools previously reserved for Fortune 500 Companies. From 831(b) Plan Enterprise Risk Management to Safe Harbor Plans to mitigate contractual liabilities, we have solutions to help you mitigate risk through tax-deferred dollars.

Watch this video to see how two of our clients utilized their 831(b) plan to weather the storm.

More Case Studies

831(b) Plan

3rd Party Business Interruption


Industry Specific

Health & Wellness Nutrition & Weight Loss

Annual Gross Revenue

$1.8 Million

Owner Structure

LLC with two owners

Employees

6

Risk

The company relies heavily on technology in order to operate their thriving business. A majority of sales come from their online storefront. The business also utilizes a cloud-based software from a third-party vendor to manage their supply chain, track sales, and house client data.

Company Profile

Victorious Health and Wellness (Victorious) is a mid-sized company located in Northern Arizona specializing in personal care and health products. They operate two small boutiques in Arizona, however, most of their business is conducted through their online storefront. The company is owned by a husband and wife interested in offering their customers the highest quality health and wellness products with the utmost focus on customer service.

Business Situation

  • Victorious is a highly profitable company with most sales being generated through their online storefront.
  • Two years ago, Victorious began offering a monthly subscription package. Due to the popularity of this program, Victorious adopted a cloud-based management software to better track orders, client data, and supply chain logistics. This also allowed the company to manage the growth without an increase in hiring.
  • Because Victorious is heavily reliant on their reputation and customer service, the owners decided to purchase a cyber insurance policy as part of their traditional property and casualty insurance which covers:
  1. 1. Notifying the affected customers
  2. 2. Credit monitoring of affected customers
  1. 3. Breach investigation
  2. 4. Legal advice and reputation
  3. 5. Judgments or settlements
  4. 6. Cyber business interruption
  • The policy contains exclusions for business income loss due to a 3rd party vendor outage, other than a security breach, with sublimits on cost incurred. Also excluded are costs incurred to recover and organize lost data.
  • Victorious is concerned that an outage or interruption with their 3rd party software or website would result in a non-covered event. Even if a cyber claim was determined to be valid, the owners believe the policy sublimits would hinder their ability to fully recover from a catastrophic loss.

Details of the 3rd Party Business Interruption Strategy

  • SRA designed an ERM strategy that would help to recoup loss of income due to a 3rd party outage or interruption.
  • The strategy addresses other cyber risks that were excluded from Victorious’ current cyber policy and sublimits associated with the current policy.
  • The strategy addresses other cyber risks that were excluded from Victorious’ current cyber policy and sublimits associated with the current policy.
  • The ERM Strategy also addresses any losses incurred to Victorious' brand or reputation due to adverse media reporting.

Solution

SRA successfully implemented a strategy that would ultimately protect Victorious if a 3rd party software failure resulted in a loss of income. SRA also created and administers an ERM company, with the same ownership structure as Victorious, to more efficiently manage risk to the company’s unfunded liabilities. Through SRA’s program, Victorious was able to utilize the available tax efficiencies that allowed the owners to manage these risks more effectively.

Benefits to Victorious and Owners

  • The ERM program created a source of tax advantaged funds to mitigate the risks of a loss of income associated with the interruption of a 3rd party vendor or cyber breach.
  • The strategy filled the gaps within Victorious’ current traditional cyber policy.
  • The ERM strategy also managed the risk of the company's reputation in the event of bad publicity.
  • Victorious now felt better prepared in the event of a cyber interruption.

Request More

SRA 831(b) PLAN PLAN OPTIONS

Employer Liability Interruption

Max Claim

Medical Professional

Dental Professional COVID-19 Claim

Safe Harbor Plan Options

Custom Warranty

Dental Protection Plan

Medical Allied Reinsurance Company

Storage Assurance

Tenant Assurance

© Copyright 2021 SRA 831(b) ADMIN.
All Rights Reserved