PROTECT YOUR BUSINESS
What types of insurance are available?
Business Insurance
Whatever type of business you’re in, it’s important to protect yourself against the unexpected. Taking business insurance will protect you against a range of contingencies like fire, burglary, product and public liability.
Buy-sell agreements
When an owner of a business dies or becomes disabled, often the surviving business partner/s will desire ownership and control of the business, and the estate will want funds to maintain their lifestyle. Buy-sell insurance arrangements can provide the money for this. It allows the surviving business partner/s of a business to buy out the deceased owner’s interest in the business.
Buy-sell insurance should be considered in conjunction with how much personal insurance a person needs.
Most business owners don’t leave their tangible assets (buildings, plant, equipment and stock) uninsured for a single day. Yet it is not their tangible assets, but themselves, their business partners and their key people, who make the business successful.
So, the question is not whether to insure business partners, for the need to protect them is obvious. The question is only: How much insurance should you have on them? Or, how much is a business partner worth?
Property damage insurance
Property damage insurance covers your stock, contents and premises in the case of risks such as fire, water or storm damage and theft.
Key person insurance
Key person insurance will protect your business by providing a lump sum payment to the business if a key person who makes a significant contribution towards the profitability and capital value of the business dies, becomes totally and permanently disabled or suffers from a trauma event.
In simple terms, the business takes out a life insurance policy (e.g. death, total and permanent disablement and trauma cover) on the key person. If a claim is made, the business receives funds to cover the expenses of replacing the key employee (e.g. recruitment and training).
How much is enough?
When it comes to your business, you can’t afford to take chances.
Save you thought about what would happen if your business was seriously damaged or destroyed by a catastrophe, such as a fire, hail storm or cyclone?
Your business insurance may cover the costs of rebuilding your premises but what about your lost income? Can you afford to lose customers or pay wages and other running costs until you can trade again?
That’s where Business Interruption Insurance comes in.
It is designed to cover the business owner for the trading income that’s lost if the business is temporarily unable to operate following an insured event. It provides you with the assurance that you can get back on your feet again.
Consider these statistics. Of those businesses that do suffer a major loss and do not have business interruption insurance:
- 43% do not resume trading*
- 28% fail within 3 years*; and
- only 29% survive*.
Other factors to consider when insuring for business interruption insurance include:
- indemnity period
- future growth of your business
- claims preparation costs
- accounts receivable
- additional increased cost of working.
To understand more about how types of cover and when you would need this type of insurance contact Prime Money Matters Risk services and speak to one of our consultants.
