Warranty and extended protection plan contracts sold by dealers or manufacturers to buyers of commercial products such as construction equipment can increase resale value, raise customer loyalty, boost uptime, and lower operating costs. But before extended protection plan sales can begin, the advantages and disadvantages of various risk management options must be considered.  -

Warranty and extended protection plan contracts sold by dealers or manufacturers to buyers of commercial products such as construction equipment can increase resale value, raise customer loyalty, boost uptime, and lower operating costs. But before extended protection plan sales can begin, the advantages and disadvantages of various risk management options must be considered. 

LAS VEGAS – Organizers of Warranty Chain Management Conference (WCM) announced that Jimmy Bynum, president of Garde Solutions, will lead a panel discussion dedicated to understanding risk management options for warranty, at the 2021 event, taking place Aug. 29 – Sept. 1 at the Bellagio Las Vegas. Bynum will be joined by Jonathan DiNoto, warranty manager at Kubota Tractor Corp. and Hornbeam Insurance's senior vice president, Dan Tafel.

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“Service contracts sold by dealers or manufacturers to buyers of commercial products such as agricultural or construction equipment can increase resale value, raise customer loyalty, boost uptime, and lower operating costs for the equipment owner," said Bynum, president of Garde Solutions. "But before extended protection plan sales can begin, the advantages and disadvantages of various risk management options must be considered."

Business-to-business and consumer extended protection plans are valuable risk management mechanisms that not only help manage the cost of ownership, but support a more integrated relationship between the dealer and customer. When optimized, these plans create a circular economy, providing both direct and indirect value for manufacturers, dealers, and customers.

When it comes to managing the liabilities associated with warranties or extended protection plans, there are three options:

  • Leave it on your balance sheet, essentially self-insuring; 
  • Insure it through a third-party insurance company; or 
  • Establish a captive insurance company. 

This session explores the advantages and disadvantages of each option and draws insight from experts in the field to provide a complete picture of the ways to manage liabilities.

It is important to stress that each company will have different goals and risk management needs. To help guide them and determine which option makes the most financial and strategic sense, each company should look to their corporate strategy and answer a few questions: 

  • What are the main financial drivers?
  • What is the risk appetite?
  • What level of risk management expertise exists within the organization?

"The panel discussion at Warranty Chain Management will do just this," Bynum added. "Jonathan Dinoto of Kubota and Dan Tafel of Hornbeam Insurance are my panelists – you will get to hear their own experience in making those decisions.”

To inquire about sponsorship and exhibition opportunities, contact David Gesualdo via email or call 727-947-4027. 

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