Calculator
Enter your asset values, risk assumptions, and safeguards. Then review the score, protected assets, and recommended actions.
Asset mix and liquidity pressure
Liquid balances and receivables often move fastest in a dispute. If cash and receivables exceed 25% of total assets, strengthen account controls, payment terms, and separation between operating and reserve funds. Inventory and equipment can be supported by clear schedules, lien tracking, and periodic valuation updates that align with current replacement costs. Track where deposits land, who can move funds, and how quickly payments clear.
Expected liability versus limits
Expected liability is modeled as probability multiplied by severity and adjusted by the selected risk multiplier. When the coverage limit falls below 1.25× expected liability, the gap becomes a priority because it directly increases expected uninsured exposure. In many scenarios, raising limits modestly can reduce exposure more efficiently than building reserves alone. Revisit assumptions after major projects or expansion, and after taking on locations or higher-value contracts.
Structure and segregation effects
Structure drives the shield factor, then segregation raises it by up to 0.15. Moving from a basic structure to a stronger entity approach can lift the shield factor toward 0.70, while a layered operating and holding setup can approach 0.80. Higher segregation also reduces commingling risk, which helps maintain boundaries in real‑world disputes. Keep separate books, document transfers, and avoid shared credit lines.
Controls that change outcomes
Controls scores combine contract strength, operational safeguards, and training. Higher scores reduce expected uninsured exposure in the model and lift the overall protection score. Aim for 70+ by standardizing contracts, tightening vendor onboarding, testing incident response, and refreshing training at least quarterly. These improvements often reduce loss severity without large fixed‑cost increases. Use audits and tabletop drills to find gaps early.
Reserve planning and continuity
Reserve coverage is expressed as months of expenses. With monthly expenses of 18,000 and reserves of 60,000, coverage equals 3.33 months. A three‑month target fits stable operations, while volatile revenue may justify six months or more. Use the reserve gap output to set a contribution plan tied to sales cycles and seasonal cash needs. Set triggers for using reserves and a replenishment rule.
FAQs
1) What does “exposed assets” represent?
It estimates net asset value that may remain reachable after modeled safeguards and insurance gaps. Use it to compare scenarios, not as a legal conclusion.
2) How is the protection score calculated?
The score blends structure and segregation, insurance adequacy, reserve months versus target, and control maturity. Each part is normalized to 0–100 and weighted into one score.
3) Why is there a coverage buffer above expected liability?
A buffer helps address volatility, defense costs, and clustered events. The model uses 1.25× as a consistent planning benchmark for comparing options.
4) Can I use any currency?
Yes. Keep every input in the same currency. Mixed currencies will distort net assets, exposure, and score outputs.
5) Which inputs typically move results the most?
Claim probability, claim severity, and insurance limits usually drive the largest swings. Segregation and controls matter too because they influence shield factor and uninsured exposure.
6) Is this tool a substitute for professional advice?
No. It is a planning model for prioritizing safeguards and documenting assumptions. Confirm legal structure and coverage decisions with qualified advisors.