Protecting The Health Of Your Business

Are you Self Employed?

When you run your own business, a lot rests on your shoulders.

Business debts, running costs, employee wages, all depend on your ability to keep working. Then there’s your everyday personal expenses, the household costs, the family. There is a long list of ongoing costs to consider and it’s important to separate the business costs from your personal expenses when thinking about insurance.

Income Protection provides an ongoing monthly benefit if you are totally or partially disabled and are unable to work. This benefit could be used to help cover your daily bills and assist in maintaining your standard of living. Its aim is to replace up to 75% of your gross income as an ongoing benefit if you are unable to work due to sickness or injury.

Business Expense Protection is designed to assist business owners to ensure that their ongoing fixed business expenses, such as rent, electricity, and non-income producing staff wages, continue to be paid while you’re not working due to injury or illness for the first 12 months.

While many self-employed believe that a good Income Protection policy provides adequate coverage, the policy really only covers 75% of your income, which is based on the net profit of the business after expenses. In the event of a claim the ongoing business expenses would need to be funded from their personal income protection benefits. This can be a huge expense in the first 12 months and a costly mistake to make.

The good news is these policies are easy to get, relatively inexpensive and the premiums are tax deductible. With your latest set of accounts and a quick application over the phone it can be arranged with minimal impact on your very valuable time.

Are your Business Interests Well Protected?

No matter what kind of business you have, a robust plan needs to be in place for dealing with the short term or long term loss of key individuals in the event of accident, death or disablement.

Does your business have the scope to weather the financial loss sustained by the unexpected exit of one of your big earners? How will you repay your loans or even make budget without the continued revenue that they bring in?

Protect Against Loss of Capital with Debt Protection

Taking out a lump sum policy on the life of the business owner provides a cash payment to pay off business loans or personal guarantees in the event of their serious illness, disability or death.

Protect Against Loss of Revenue by Covering Key People

If your business revenue would feel a significant impact at the loss of a key person within your business, the company can take out a policy on the life of that person to make sure your business remains profitable

Succession Planning

Many business owners avoid the issue of Succession Planning. Either time constraints or complexity of business structure are often blamed. Protecting your business interests from the consequences of the untimely exit of a partner due to death or disablement should be any business owner’s first port of call.

Without sufficient funding to buy out your partners interests, your situation can become very complicated very quickly. You may need to draw on capital or sell off assets to avoid going into business with your partner’s spouse.

Life insurance can provide a lump sum cash payment to purchase the outgoing business partner’s share in the business.

By preparing a Buy / Sell Agreement that stipulates how the business will deal with the succession of each partner, you can protect each partners share in the business by ensuring the funds are available to purchase their share in the event of death or serious injury or illness.