Over the last two weeks, we have put forward the thesis that most small and mid-size businesses are underinsured and that for many, the best remedy is to own their own captive insurance company. Owning a captive insurance company enables small and mid-size business owners to blend third party commercial coverage with coverage by their captive. This blended approach results in far more robust coverage, helps overcome the “sunk costs” trade-off of purchasing insurance, and can turn risk management into a profit center.
With that in mind, ponder the following quote from the FBI’s web site:
The National Security Branch leads the FBI’s efforts to detect, deter, and disrupt terrorist threats to the United States and its interests. We continue to identify individuals who seek to join the ranks of foreign fighters traveling in support of the Islamic State of Iraq and the Levant (ISIL), and also homegrown violent extremists who may aspire to attack the United States from within. The terrorist threat against the United States remains persistent and acute, and preventing terrorist attacks is the FBI’s top priority.
Do you remember when terrorism wasn’t the FBI’s top priority? Do you remember going to the airport and boarding your plane without showing any identification or passing through any security or screening? I do.
A lot has changed in our post 9-11 world. With porous U.S. borders, it’s reasonable to believe that it is only a matter of time before the next major terror attack strikes on U.S. soil, possibly disrupting U.S. businesses.
A terrorist attack can have a significant impact on small and mid-size businesses. Terrorist attacks could include the power grid, dams, bridges, the water supply and numerous other “soft” targets. The business interruption and other related costs posed by such an attack could be sizable. The flexibility that captive insurance companies afford their owners make them the ideal vehicle to manage risk and position small and mid-size businesses for long term survival in increasingly uncertain times.