Most business owners live and breathe their work. This is all good if everything is fine and dandy but can spell absolute DISASTER if unforeseen circumstances come in to play.
Ask yourself, what would happen if you were to get so sick that you were unable to work for an extended period? Would the business continue to succeed without your presence? Would you be able to continue to pay the bills?
Chances are the answer is no.
We take out health insurance, car insurance and home and contents insurance as if it’s second nature, but for some reason when it comes to insuring our business and our income we tend to hesitate. Why this is, I don’t really know. Despite these apprehensions that I often encounter in my industry, the truth is that you owe it to yourself, your colleagues and your family to ensure that you have the right insurance in place.
If insurance is a dirty word for you then I suggest leaving the word “insurance” out of the conversation with yourself and instead ask yourself about your ‘Plan B’.
If disaster struck tomorrow, would you, your family and your business be ok financially?
Maybe you have an agreement with your business partners? Maybe you have enough assets/savings to keep you out of trouble? If you have none of these things, then it is vital that you look at what insurance you need to protect yourself.
Here is a brief overview of the key types of insurance you should look at as a business owner:
Asset Protection: Insurance that eliminates debt in the event of death or serious illness of a business owner.
Revenue Protection (Key Man Cover): Insurance that guarantees a cash injection for lost revenue due to death, total disablement or severe illness of key people in the business.
Ownership Protection: Insurance that guarantees that passing shares are purchased back by a surviving business partner at an agreed value.
Income Protection: Insurance that covers you for ongoing personal income as the business owner if you are unable to work longer than 14, 30 or 90 days.
If you own and run a business, I recommend you speak to a qualified financial advisor about what sorts of insurance are appropriate for your specific, individual situation.
Chris Browne is the Founder and Managing Director of Rising Tide Financial Services as well as a highly regarded business coach, mentor and industry expert.