The CED Group recognizes that, very often, the perceived risk of opening up a hiring firm's supply chain to a new highly inclusive vendors (minority-owned or local suppliers) is often the stumbling block that excludes these firms from participating in a given value chain. As such, we encourage our supported highly inclusive firms, as principals who will deliver on the contractual obligation, to utilize security bonds to mitigate both real and perceived risk to the hiring recipient firm. As part of our surety bond program, our partners provide consultative services to assure our supported firms' strategic capabilities are maturely developed and documented and the firms can be underwritten for the recommended or required surety bonds, working with bond producers and insurance companies on behalf of the supported firms.
Property Casualty Insurance
The CED Group recognizes that many small and medium firms have not fully assessed their commercial risks and appropriately transferred risks through insurance. We provide business risk assessments and help firms sort through the appropriate risk mitigation strategies, based on market availability of property and casualty insurance. Any time a business expands, whether it's new services, new assets, or new markets, its risk profile changes. We provide world class risk management disciplines for our supported firms and have partners in all aspects of commercial risk transfer. Effectuating the appropriate risk transfer through property and casualty insurance products and services and having the support of a responsive insurer and can improve worker safety, protect transactions and assets, provide for recovery from catastrophes and tragic events, and give a firm needed representation in many aspects of legal affairs.
Risk Retention Group
CED Group and its participating members can support and assist in the development of risk retention groups. A risk retention group (RRG) is an innovative and alternative risk transfer entity created by the federal Liability Risk Retention Act (LRRA). A Risk Retention Group is a corporation or limited liability association formed under the laws of any state for the primary purpose of assuming liability exposures on behalf of its members. Members of the group must be engaged in similar activities or related with respect to liability exposures by virtue of any related or common business exposure, trade, product, service, or premise. Members must have an ownership interest in the group and only members may benefit from the group. It should be noted that risk retention groups can only apply to liability loss exposures.
RRGs provide their members with the following benefits:
- - Program control
- - Long-term rate stability
- - Customized Loss control and risk management practices
- - Dividends for good loss experience
- - Access to reinsurance markets
- - Stable source of liability coverage at affordable rates
- - Multi-state operations
The CED Group and participating members can assist in the formation and support the ongoing operation of an insurance captive. A captive is defined as an insurance entity that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer’s underwriting profits.
Captive insurance is characterized by three essential features and are utilized by insureds that choose to:
- - Put their own capital at risk by creating their own insurance company,
- - Working outside of the commercial insurance marketplace,
- - To achieve their risk financing objectives.
Capital Markets Investment for Insurance
The CED Group can develop bespoke solutions for gaining access to needed capital for risk transfer and risk management. We employ the concepts of Risk Retention Groups and Captives along with selling of debt and/or equity to form the necessary and needed capital pool for insurance purposes.
Venture Capital Insurance
The venture capital (VC) industry is the engine behind much of the disruptive technology changing the world. This disruptive dynamic exposes VC firms to unique risks. Portfolio companies are often involved in intellectual property disputes, failed M&A transactions and regulatory actions, all of which have the potential to involve the VC firm.
Bankruptcy of a portfolio company will undoubtedly enmesh the venture firm but a plaintiff or regulator may bring an action against a venture firm for a matter involving a portfolio company if such party perceives a deep pocket. Furthermore, increased investment opportunities outside of North America expose venture firms to different and sometimes higher risk in regulatory and competitive environments.
Successful VC firms often invest in a blended venture capital insurance policy that offers protection from three main exposures: Management Liability (aka Directors & Officers or D&O), Professional Liability (aka Errors & Omissions or E&O), and Employment Practices Liability (EPL). These policies aim to cover a wide range of situations with the goal of hedging against one of the scariest expenses that can blindside a company: legal defense costs.