Have you ever stopped to consider who the key people are in your business, and how your business would survive without them?
The uninsured impact of a personal tragedy can be disastrous to a business. According to the small business council of Australia, one in five businesses have to be wound up following an event affecting a key person.
But with key person insurance you can protect your business and ensure it can continue without financial loss in the event of an illness, injury or tragedy. It should in fact be a core part of your business succession plan.
Key Person Insurance
Key Person insurance is an essential part of financial planning for business owners and business partners. Most businesses would suffer painful financial losses if a key person who contributes to the profitability of their company were to die or be totally and permanently injured. But it can be insured against with Key Person Insurance, allowing the business financial continuity until their important team member can be replaced.
Business Succession Planning
Any business with two or more owners, including family businesses, must consider the impact upon the business should one of the business partners die, become totally and permanently disabled or suffer a terminal or traumatic illness. Without appropriate planning and advice a business can quickly go into disarray. For example, if your business partner were to suddenly die in a tragic car accident you may find yourself in business with one of the family members, of the deceased, who has completely motivational different drivers, needs and desires and may question if the business should continue at all.
The solution: A business succession plan, or buy-sell agreement as it is commonly referred to, in conjunction with the necessary funding arrangements, like buy-sell insurance can help ensure a smooth transition for the business during difficult times.
Business Expense Insurance
Business Expense Insurance covers ongoing fixed business expenditure if the person insured is unable to work due to injury or illness. This cover is designed to assist individual business owners for a limited time by providing business continuity in the event of temporary illness or injury. The insurance payment is there to support a business through a difficult period, and it can often be the difference between a business closing down, and keeping staff on board.
To understand whether Business Expenses Insurance is appropriate for your circumstances, contact your Complete Financial Balance Adviser today.