Keep your business functioning and protect the value of your business
Well structured business insurance helps keep your business functioning and protects the value of your business in the case of unplanned events.
Consider the alternatives
- Absorbing the loss into the profits.
- Tying up capital in an emergency fund.
- Borrowing the funds if you can at the time.
- Selling existing business or personal assets.
- Losing control of your business.
In most cases, the cost of the alternative is 100 cents in the dollar!
Exposure to Unnecessary Financial Risk
Without business insurance, your family and your business associates could be exposed to unnecessary financial risk.
If the unthinkable happened to you ask yourself these questions.
- Would you or your family receive adequate payment for the transfer of your stake interest in the business?
- Would any loans the business owes to you be quickly repaid?
- Would you, your family or your estate be released from any personal guarantees given to lenders for business loans?
- Would your personal assets, such as your home, provided as security for business loans, be released to you, your family or your estate?
- Would you have sufficient financial resources to protect your income and family’s lifestyle?
- Would you know what your insurance will cover?
If the unthinkable happened to your business associates or key employees ask yourself these questions.
- Would any ownership succession be orderly, equitable and funded?
- Would the valuation of your business be maintained?
- Would your business maintain the confidence of lenders and trade creditors?
- Would your business have enough cashflow to meet its commitments?
- Would you retain key employees via confidence in your business?
- Would your business have the financial capacity resources to recruit and train new key employees?
- Would your business be able to pay out, or reduce, business debts to protect the personal guarantees supported by the personal assets of the business owners?
We work with our clients as both business owners and as private individuals with personal financial planning concerns. Understanding the way that your business and personal lives interact is important to us, particularly where business ownership structures may involve multiple family members.
The vast majority of private sector businesses in Australia are small to medium-sized enterprises. As a business owner you will be only too aware of how dependent its continued success can be on a small number of people and their skills and hard work.
Smaller businesses are particularly vulnerable to their owner-managers or a key sales or technical director becoming incapacitated, and ‘key man’ insurance can be crucial in protecting a business in the event that tragedy strikes.
Some business insurance policies are compulsory such as public liability insurance and workers compensation insurance and third party motor if you use motor vehicles. But you might also want to consider help with other areas of insurance such as financial security and medical assistance for you and your employees in the event of illness.