Running a business is a rewarding experience that grows the more time and care you put into it. Some factors, however, are outside your control, and that is where your insurance plan comes into play. Yet, with economic turmoil potentially on the horizon, there are even some pitfalls that most traditional insurance companies will not cover. To better cover those bases, looking into the widespread coverage of an 831(b) risk assessment plan is prudent.
Supporting Self-Sustainability Through 831(b) Plans
An 831(b) plan allows private businesses to diversify funds into safety nets for extreme and unforeseen circumstances. Things that might have seemed superfluous to plan for just years ago, like pandemic coverage, are now crucially underrepresented within insurance plans for small and medium-sized businesses (SMBs). These 831(b) plans, which were once relegated to big business sectors, are now being offered to those in the SMB range through companies like SRA 831(b) Admin.
SRA’s goal is primarily to inform business owners of the intent of the 831(b) tax code while driving the importance of business owners being their own Paycheck Protection Program. Coming off the heels of intense business growth since the downturn caused by COVID-19, SRA hopes to lay the foundation for businesses to continue to survive or even thrive through another pandemic-like economic disaster.
“Business leaders should not expect bailouts like PPP loans from the government the next time they are needed and should prepare accordingly,” said Van Carson, founder and CEO. “An 831(b) plan not only helps businesses offset losses not covered by traditional insurance but also helps provide a safety net for the unexpected. The pandemic was a wakeup call for business owners, which is why we have seen a significant uptick in the usage of these plans since then.”
Learning and Helping Others Grow through Economic Uncertainty
SRA, a family-run business based in Boise, Idaho, is no stranger to weathering the storm of economic collapse. The company was founded just a year after the catastrophic 2008 economic crisis. Carson, who was employed as an agent at Farmers Insurance at the time, was surprised to discover that among the carnage of the ‘08 crisis, a handful of small businesses could still press on.
After extensive digging, Carson found that the secret to riding the ebbs and flows of the economic disaster was to lean on 831(b) plans. Thus, SRA 831(b) Admin was born from a passion for helping other small businesses navigate risk mitigation and educating business owners about the benefits of these plans.
The Coronavirus Pandemic: A Wake-Up Call for Businesses
The beauty of the 831(b) plan is in its proven success. While still burgeoning, 831(b) plans have been used to great success by nearly every Fortune 500 company. This underutilized mitigation strategy is only now seeing more widespread acclaim and adoption since the pandemic. Seemingly a wake-up call for businesses across the United States, the pandemic proved that disaster can strike at a moment’s notice, and it’s important to be prepared.
Despite the uptick, these plans are still wildly underutilized. This is in part due to the limited guidance surrounding the usage of these plans. There could be a larger uptake of these plans in the future if Congress passes legislation requiring the IRS to provide more clarity for business owners.
Equipping Businesses to Prepare for the Unexpected
SRA’s 831(b) plans are incredibly flexible and tailored to each individual business based on their needs. While preparing for the worst is important, they understand that each business has its own priorities. SRA stands to not only educate business owners on practices that they might not be privy to, but they also seek to build a plan that adheres to each specific business. To know whether a business qualifies for one of these plans, SRA has developed a simple assessment that can be found on their website to determine eligibility.
Ultimately, business owners have a duty to both themselves and their companies to expect the unexpected. In a post-pandemic world, diversifying one’s planning to cover uncommon, underinsured risks has become more important than ever. The world of business ownership can be a tumultuous route, but SRA and the 831(b) risk mitigation plan is a worthwhile liferaft.
[Related: How to Market Your Business During Economic Uncertainty]
