As a “new” business owner you probably don’t think twice about taking out insurance cover to protect your business assets such as your premises, equipment and vehicles.
But what about the other elements of your business – yourself as the owner, key employees like your business partner, or even your financial commitments or debts?
Whether you are a sole-trader or a larger operator, risk protection can be as important as maintaining cash flow. Having the right insurance can help you manage some of these risks that you may not have thought about, and minimise the impact of events beyond your control.
Insuring your business can provide cash to:
- Protect your business and personal assets
- Reduce the impact of a decrease in business revenue
- Arrange ownership transfer that is fair
- Protecting assets – Having the right insurance in place will mean that you will have the funds to reduce or repay any business debt and importantly protect any personal assets you may have used to secure your business funding.
- Protecting revenue – Protect your growing business that may depend on a key person for revenue generation. For example, should your key sales person leave the business (due to major illness) what would happen to your business?
- Business ownership – Owning a business in partnership means all partners need to protect their equity investment to ensure that the future control of the business stays with the business. Change in ownership due to death, disability or crisis event could jeopardise the businesses financial future.
Other risks to consider
|Protect your income||Particularly important for people who are self-employed or run their business through a company or trust||Insurance provides you with regular payments if you are unable to work due to illness or injury. So you won’t have to use business resources to help pay for personal expenses during this time.|
|Meet your business expenses||Should be considered by all small business owners.||Insurance to cover fixed business expenses to keep the business afloat during a period of sickness or injury.|
|Treat your beneficiaries equally||Important for family businesses||Insurance can provide funds to equalise your estate and help you achieve your estate planning objectives.|