If you’re like many businesses you have already insured the physical assets of the business from theft, fire and damage. But have you investigated the value of insuring yourself – and also other key people in your small business – against the potential for death, disability and illness. Not being adequately insured can be a very risky oversight, since the long term absence or loss of an important person may have a dramatic effect on your organization along with your financial interests in it.

Protecting your assets
The organization knowledge (generally known as intellectual capital) supplied by you or another key people, is often a major profit generator to your business. Material things can still be replaced or repaired but a key person’s death or disablement can lead to a fiscal loss more disastrous than loss or damage of physical assets.
If your key people are not adequately insured, your small business could be made to sell assets to keep cash flow – specially if creditors press for payment or debtors suppress payment. Similarly, customers and suppliers might not exactly feel confident in the trading capacity in the business, and it is credit standing could fall if lenders are not willing to extend credit. Moreover, outstanding loans owed through the business to the key person can be called up for fast repayment to enable them to, or their family, through their situation.
Asset protection provides the company with enough cash to preserve its asset base in order that it can repay debts, take back cash flow and look after its credit standing in case a business owner or loan guarantor dies or becomes disabled. It may also release personal guarantees secured by the business owner’s assets (for example the family home).
Protecting your organization revenue
A drop in revenue is usually inevitable whenever a key person is no longer there. Losses may also result:
• from demand that can’t be met
• while you’re finding and training the right replacement
• from errors of judgement that will happen due to a less experienced replacement, and
• through the reduced morale of employees.
Revenue protection provides your business with sufficient money to compensate for that lack of revenue and charges of replacing a vital employee or small business owner should they die or become disabled.

Protecting your share in the company
The death of your company owner may lead to the demise of an otherwise successful business mainly because of deficiencies in business succession planning. While companies are alive they may negotiate a buy-out amongst themselves, by way of example on an owner’s retirement. Let’s say one of them dies?
Considerations

The best kind of company protection to cover you, your household and colleagues is dependent upon your overall situation. A fiscal adviser may help you using a number of items you should address when it comes to protecting your company. Like:
• Working using your business accountant to discover the valuation on your business
• Reviewing your own personal key man insurance policy should make certain you are suitably covered with potential tax effective and convenient methods to package and pay premiums, and review any of your existing insurance
• Facilitating, with legal services from a solicitor, any changes that may are necessary on your estate planning and be sure your insurances are adequately reflected with your legal documentation.
A monetary adviser can offer or facilitate advice regarding every one of these as well as other items you may encounter. They can also use other professionals to make sure all aspects are covered in a integrated and seamless manner.
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