Practical Experience with Proven Insurance Strategies
831(b) PLANS
831(b) Plans
The 831(b) tax code allows a business to set aside tax-deferred dollars for underinsured and/or uninsured risks similar to the 401(k) tax code which allows compensation to set aside tax-deferred dollars for retirement. There are many similarities between the two and business owners should consider the risk mitigation advantages.
WHO CAN BENEFIT
Agriculture
Auto Dealers
Construction
Dental Practices
Equipment Dealers
Legal Professionals
Manufacturers
Mechanical Trades
Medical Professionals
Oil & Gas
Property Managers
Retail Sales
Storage Units
Technology
Trucking
Veterinarians
Safe Harbor Plans
Custom Warranty
A properly designed custom warranty program could help a business develop new revenue streams, leverage an insurance company in order to maximize benefits, and generate goodwill with current & prospective customers. Warranties can be a valuable tool and help the business stand out amongst the competition. Whether your company already offers a warranty program, or is considering offering one, let Touchpoint discuss with you how the Custom Warranty by SRA can be an asset to your business.
Dental Protection Plan
While some dental practices offer their own warranty program, they frequently miss a key advantage provided within the 831(b) framework. The Dental Protection Plan (DPP) designed by SRA not only provides a customizable limited warranty program tailored specifically to the dental industry, but it allows the honoring of the warranty program with 831(b) tax-deferred dollars.
Deductible Reimbursement
Traditional insurance carriers focus on minimizing their claims exposure and one way they do so is by raising policy deductibles. As deductibles continue to increase it places even more burden on insured. The Deductible Reimbursement plan by SRA allows businesses with multiple policies covering several exposures like auto, workers compensation, general liability and more, the ability to accumulate tax-deferred reserves to lower the burden of growing deductibles.
Contract Default Liability
The Contract Default Liability safe harbor designed by SRA allows general contractors, agencies, and other businesses who enter into frequent contractual agreements with vendors and subcontractors the ability to build tax-deferred reserves to manage the risk associated the contractual agreements. When a vendor or subcontractor becomes unreliable and defaults on a contract, the tax-deferred reserve can then be used to hire the replacement vendor or subcontractor.
Crop Insurance
MPCI policies provide coverage for loss of production or a combination of yield and price coverage provided through the Federal Crop Insurance Corporation (FCIC). These policies provide coverage to the agricultural producer for a number of naturally occurring perils and combination products also cover loss in value due to a change in market price during the insurance period. MPCI is federally supported and regulated, and is sold and serviced by private-sector crop insurance companies and agents.
Pasture, Range & Forage (PRF) – The RI-PRF insurance plan is a risk management tool designed to insure against a decline in an index value that is based on the long-term, historical, average precipitation for the same area of land for the same period of time. It does not measure, capture, or use the actual crop production of any producer or any of the actual crop production within the area. PRF is designed to provide insurance coverage on pasture, rangeland, or forage acres. The program utilizes a rainfall index to determine precipitation for coverage purposes. The Pasture, Rangeland, and Forage insurance was designed to help protect a producer’s operation from the risks of forage loss due to the lack of precipitation. Coverage is based on a producer’s selection of coverage level, index intervals, and productivity factor.
Annual Forage is a Rainfall Index insurance policy that provides coverage on any annually planted crop used for forage or fodder by livestock. This pilot program is designed to protect against a single peril, lack of precipitation. Annual Forage has four growing seasons. At least two to three different intervals need to be selected for Annual Forage coverage depending on the state. The months within the intervals cannot overlap. Available on red top cane, triticale, wheat, barley, rye, oats, millet, hay grazer, and corn for silage.
Livestock Risk Protection (LRP) protects your investment should prices drop before your livestock gets to market while preserving your upside potential. LRP is similar to a put option, allowing producers to establish a floor price for protection while leaving upside price potential open. Unlike market contracts and options, it does not require a margin account or broker, it is closer to the actual ending value of the livestock and is based on cash market index price rather than the futures market. This federally-sponsored program insures against declining market prices (based on USDA’ Agricultural market Services).
Livestock Gross Margin (LGM) provides coverage for the difference between the commodity and feeding costs. If the producer-determined expected gross margin is greater than the actual gross margin, an indemnity is due.
Dairy Revenue Protection (DRP) is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level. The expected revenue is based on futures prices for milk and dairy commodities, and the amount of covered milk production elected by the dairy producer. The covered milk production is indexed to the state or region where the dairy producer is located.
Actual Production History (APH) policies insure producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. The producer selects the amount of average yield to insure; from 50-75 percent (in some areas up to 85 percent).
Crop Hail – Hail is one peril that can decimate a portion of your field and leave the rest undamaged. Crop hail coverage gives you acre-by-acre protection up to the actual cash value of your crop, thereby protecting your investment and your future. This policy is available in a variety of forms and allows you to tailor the coverage to meet your needs.
Crop Fire – a stand-alone named peril product that covers fire, lightening and transit.
Crop Insurance
Crop Insurance is at the foundation of crop production and revenue risk management. Touchpoint Risk Management helps our clients protect risk and preserve equity on their farms. Our excellent service and superior knowledge of federal crop insurance programs will help you utilize and benefit from the right policies and products. With roots in agricultural production we understand the risks you face, and our background in livestock and grain marketing will help you build a comprehensive risk management plan specific to your farming operation.
