Crisis Averted – Insurance That Can Save Your Business
It’s nearing the end of December, and many small business owners are preparing for year end, and the year ahead. They will take stock of which strategies succeeded or failed and adjust accordingly to grow their companies and increase productivity.
Although no one can anticipate what will happen in the next fiscal period, smart business owners prepare contingencies to ensure the viability of their companies and security for themselves, their loved ones and their employees.
But when crisis happens in a small business, it has far-reaching and devastating implications unlike those suffered by larger organizations. The injury, serious illness or death of an owner, partner or even a key person within a smaller company can ultimately kill the business.
Often small business owners focus on securing professional or business liability insurance to protect themselves from litigation. Yet there are other personal and business insurance options that can provide temporary or lump sum payments to replace lost income, buy out a partner or finance the recruitment of a highly skilled executive. Let’s look at the options.
Disability Insurance pays a monthly income if you are unable to work due to an injury or illness. You may need a few months to get better, and this type of insurance covers routine bills while you recuperate.
Critical Illness Insurance pays a tax-free, lump-sum benefit if you contract a covered life-threatening illness. Use these proceeds to take care of those closest to you and give yourself peace of mind in uncertain and stressful times.
Partner and Key Person Life Insurance is ideal for partnerships and/or situations where one employee generates a substantial portion of the company’s profits or possesses skills that are vital to the business. Here’s how it works:
A company purchases a life insurance policy on the key employee, pays the premiums and is the beneficiary of the policy. If the key person dies unexpectedly, the company receives the insurance proceeds. The company then uses the funds to pay for the deceased partner’s shares, pay off debt or finance the cost of recruitment and/or training.
Before you ask, “How much is that going to cost?” keep in mind that 80 per cent of people overestimate the cost of life insurance. As well, the company will pay the Partner and Key Person premiums on behalf of the insured individual.
Ultimately, what small business owners need to consider is in the event of injury, illness or death, what would happen to their companies, and what insurance(s) could help them get through those tough times.
Working with a skilled insurance broker is the best way to ensure that your small business has the coverage it needs at an affordable price. Visit https://bensol.ca/solutions/ to see how we can help take the confusion out of insurance.
There are few things in life more valuable than peace of mind. You can protect what matters to you most, and, in the event of the unthinkable, ensure that your small business will survive and thrive in the worst possible circumstances.
All of us at Bensol Consulting wish you a very happy holiday season, and a healthy and prosperous New Year.