Not only do business owners need to protect their incomes, but they need to protect their business interests as well! If they became too sick or hurt to work, they would also need to be concerned about:
- Paying business expenses
- Keeping the business investment intact
- Protecting key employees.
Paying Business Expenses
If your clients own businesses we can help protect those businesses and their employees with Business Overhead Expense insurance.
Business Overhead Expense coverage is designed to protect the business owner by providing reimbursement for business overhead expenses, so the business can continue to operate should the owner experience a disabling illness or injury.
Typical coveraged expenses include:
- Mortgage interest or lease payments
- Employee wages
- Business insurance premiums
Keeping the Business Investment Intact
Do your Business owner clients have a plan for the future of their businesses? If your client or one of the business partners became totally disabled and could not return to work, is there a plan and/or the means to buy out the disabled partner? Disability Buy-Out (DBO or Buy/Sell Funding) insurance can help!
Disability Buy Out coverage is designed to provide funding for the purchase of the disabled partner’s share of the business in the event that they become totally disabled. It assures that the disabled owner can be bought out at a predetermined price and time, it gives the current owners control of the business rather than the disabled owner’s family members and it provides money for the disabled partner to pay living and medical expenses.
Protecting Key Employees
Many employers protect their businesses from the loss of key employees due to death, but few protect against a key employee’s total disability. If a disability caused one of your client’s key employees to be unable to work, what would that mean for the future of the business? How would cash flow, revenues profitability and morale be affected? What would customers and creditos think?
Key Person Replacement coverage (Key Person Disability Insurance) is designed to provide the business with the funds necessary to help handle the loss of a key employee due to total disability.
The business pays the premium and owns the policy insuring the key employee in the event of total disability. If the key employee becomes totally disabled, the business receives benefits, generally tax-free, that can be used at the discretion of the business.
Typical types of Small Business that need this review include:
- Dental, Optometry and Veterinarian Practice
- Engineering and Architectural firm
- Contractors and small businesses like Plumbers and Recruiter
- Small retail shops like travel agencies, bakeries and many restaurants