Protection of your Business

We want to ensure that if you, a business partner or a key employee suffered an unexpected medical event, that this does not destroy your business.

Types

Business Expenses

Business expenses insurance, covers up to 100% of your fixed recurring business expenses like rent, utilities and non-income producing staff wages, if the insured cannot work because of sickness or injury.  Payments are made monthly as a re-imbursement of costs incurred and will pay for a maximum of 12 months.  Premiums are usually tax deductible.  

Key Person

An important area of planning within your business should be risk management of key personnel within the business.

An owner or employee is a "key person” within your business if they are responsible for generating most of the business income.  The key person will vary depending on the industry and the business.  Most employees are non income producing – that is they may have an important role in the business, but if they weren’t there tomorrow, they could be easily replaced or would have little impact on the bottom line.  

However some employees are key in that a majority of the business income would stop if they could no longer work.  

Think about the key people in your business and start your risk management planning by asking if your business could:
  • Survive if a key person was suddenly unable to work due to illness or injury?
  • Cover the loan payments to the Bank (and would the Bank call the debts in)?
  • Maintain cash flow to meet ongoing commitments?
  • Continue to provide an income to the incapacitated person?
  • Fund a succession planning strategy?
Key person insurance may take the form of Income Protection, Business Expenses, Life, Term & Total Disability or Trauma – it is the way it is used within your business that makes the difference.

Are you already thinking "but it won’t happen to my business?”

1 in 6 men and 1 in 4 women aged between 35 and 65 will suffer a disability that results in them being unable to work for 6 months or more.  For people over age 40, the risk of developing heart disease is 1 in 2 for men and 1 in 3 for women. (CommInsure 2010 claim statistics)

Yet three quarters of business owners don’t have income protection (or business expenses cover), even through the premiums are tax deductible for both. Only a quarter of business owners could maintain their current lifestyle for more than 6 months if they suffered a serious illness or injury.
 
 
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