If you’re like many business people you have already insured the physical assets of your respective business from theft, fire and damage. But have you thought about the value of insuring yourself – and also other key individuals your small business – up against the chance of death, disability and illness. Not adequately insured could be an extremely risky oversight, as the long term absence or loss of a key person can have a dramatic influence on your business and your financial interests inside it.

Protecting your assets
The business knowledge (generally known as intellectual capital) provided by you or another key people, can be a major profit generator for the business. Material things can still changed or repaired however a key person’s death or disablement can result in an economic loss more disastrous than loss or harm to physical assets.
If your key people are not adequately insured, your business may be instructed to sell assets to take care of cash flow – particularly if creditors press for payment or debtors hold back payment. Similarly, customers and suppliers may not feel certain about the trading capacity in the business, and it is credit history could fall if lenders are not prepared to extend credit. Moreover, outstanding loans owed through the business towards the key person may also be called up for immediate repayment to help them, or their family, through their situation.
Asset protection can provide the company with plenty of cash to preserve its asset base so it can repay debts, get back cash flow and look after its credit rating in case a company owner or loan guarantor dies or becomes disabled. It can also release personal guarantees secured by the business owner’s assets (such as the family home).
Protecting your business revenue
A stop by revenue is usually inevitable every time a key person is no longer there. Losses may also result:
• from demand that can’t be met
• while you’re finding and training a suitable replacement
• from errors of judgement that can happen due to a less experienced replacement, and
• through the reduced morale of employees.
Revenue protection can offer your small business with plenty of money to make up to the lack of revenue and expenses of replacing an important employee or business owner if and when they die or become disabled.

Protecting your share with the organization
The death of your business proprietor can result in the demise of an otherwise successful business as a result of a lack of business succession planning. While business people are alive they may negotiate a buy-out amongst themselves, for instance on an owner’s retirement. Suppose one too dies?
Considerations

The best the category of business protection to cover you, your household and colleagues will depend on your overall situation. A financial adviser can assist you with a variety of issues you may need to address in terms of protecting your organization. Such as:
• Working together with your business accountant to determine the value of your business
• Reviewing your individual key cover insurance has to ensure you are suitably covered with potential tax effective and convenient ways to package and pay premiums, and review any existing insurance
• Facilitating, with legal services from a solicitor, any changes which could need to be made on your estate planning and make sure your insurances are adequately reflected in your legal documentation.
A fiscal adviser can provide or facilitate advice regarding all these and other issues you may encounter. They can also assist other professionals to ensure other areas are covered in a integrated and seamless manner.
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