Business Insurance.
Whether you’re a sole trader, partnership, private company or publicly listed company it does not alter the basis for insurance considerations. The only difference being that instead of looking at the implications to your spouse or family, we need to consider the implications on your business, business partner, staff, ongoing income, clients, projects you’ve committed too.
Things you may not have considered:
My business partner and I may have a business loan to purchase that office or factory. But has the bank used either yours, theirs or both your homes as security for the loan? what happens to that loan if you can’t work……..or worse?
You and your business partners are equal shareholders. You’ve got a Will in place to protect your spouse against any claims against your Estate. Guess what? That means your spouse could one day inherit your share and be in business with your business partners. Will your business partners buy out your spouse? What price will they offer? Will the bank loan them money or will they consider the business too much of a risk considering one of the owners (YOU!!) has just passed away?
I run a small business. It’s just me and a couple of staff members. I was smart enough to take out some income protection so my income will continue if I get sick. But what about those fixed overheads that will continue? The commercial lease you still have 2 years to cover, the rates, leasing of any equipment, staff wages. Your staff will need to get paid and I’m sure you still want them to be there when you get back to work.
“My business runs itself. It wouldn’t matter if I’m not here”. We hear that a lot. If that’s true, why are you still working 50hrs per week? Why can you never go away for more than a fortnight? Why can you never turn your phone off ‘just in case’?
The Solutions.
Buy/Sell Insurance. Held in conjunction with a Buy/Sell Agreement. This agreement is effectively a Will for your business.
This ensures your spouse or Estate will get the value of your share in the business and your continuing business partner retains the ongoing business.
Keyperson Capital. Used to pay a debt or series of debts upon the death, disability or sickness of a business owner or keyperson in the business.
Keyperson Revenue. Replaces the short term revenue that may be at risk if a keyperson in your business can’t work for a period of time due to sickness or accident.
Business Expenses Cover. In simple terms, this is like having income protection for your business. It will pay those fixed business overheads that would continue even if your business isn’t operating.
