Risk Financing

As the CFO of our sister’s construction company, So Hot Right Now Houses, Inc., we’ve seen our fair share of brow-furrowing financial situations. Like...the time that storm came through and flooded all ten houses we were building on Cherry Street. Or the time we got sued because some kid broke into one of our job sites, tripped on a piece of plywood, and gave himself a concussion and a broken arm. That’s why we’re big fans of “risk financing,” which is basically a plan for achieving SHRN, Inc.’s financial goals while still having enough money—and enough insurance coverage—to make sure we’ll be okay when the next storm comes through, or when the next hoodlum trips on some plywood.

At the end of the last fiscal year, we sat down in our big fancy corner office, kicked off our Top-Siders, and then listed all the risk events we were likely to encounter over the next year, and how much they’d probably cost. Then we did a bunch of research on different risk coverage options (read: insurance) and how much they would cost. We chose the least expensive coverage options that would fully protect the company, while still allowing us to grow and thrive, and voila. Awesome risk financing strategy achieved.