Business Insurance must be part of your risk management planning to ensure you have a plan should the unexpected happen. We are normally quick to insure our business plant and equipment, but what about the owners, key people and stakeholders? after all, business is about people…right?
Have you ever stopped to think about what would happen to your business if you suddenly got sick and couldn’t go to work? What if it was one of your business partners or an employee with specialised knowledge?
How would this affect your business in the short term? If a return to work was not possible then what would be the long-term implications? What would happen if a key person died?
A good exercise is to work through some scenarios on what would happen on the death or disability of the key people in your business. If you have the answers and know what you would do, then congratulations! you have taken a positive step in managing some of the financial risks you may face.
The next question is, “to implement your plan,” do you need additional funds? If so, would these come from existing capital, borrowings, new investors or a business insurance policy? (It is very difficult to raise this type of cash flow funding after an event that negatively impacts your business, you should have your emergency funding sorted before the emergency).
There is a wide range of business insurance solutions which will keep your business healthy when the health of you or one of your key people has failed. They provide comprehensive cover based on the expected financial impact on a business over time if a key person is unable to come to work.
All contingencies are conveniently covered in one business insurance policy, as different monthly sums assured can be selected, with lump sums payable on long-term disability, trauma and death. This means that you can select the level of your benefit to cover a range of scenarios, without the need for multiple benefits.
Ill health and lack of health insurance are one of the four main causes of people going bankrupt.*
*Ministry of Economic Development – Insolvency and Trustee Service Statistical Data Report 2007-2008