Business Income Protection (key Person Cover)
Are you protecting the turnover of your Business?
If you’re in business, chances are you insure your premises, vehicles, equipment and stock against fire, flood and theft. But have you stopped to think what would happen if you lost one of your most valuable assets – the people who make up your business including you?
At New Zealand Financial Brokers, one of our specialties is the highly skilled area of protecting your business with Business Risk Insurance.
What is the purpose of Business Insurance?
There are three main areas to allow for when considering what you need to do to protect your business:
1. Preventing a major interruption to your business (Key Person)
Do you have a key person or key staff in your business that generates a large portion of your turnover? Maybe that person is you and without your drive and passion your business would simply STOP. A key person policy will respond – whether it is permanent or temporary. This can include:
1. You can insure up to $50,000 per month
2. Replacing lost monthly revenue
3. Recruiting a new employee or a replacement person to run your business
4. Paying fixed monthly overheads like rent, loan repayments etc
This policy is a Tax Deductible expense.
2. Protecting your debt
Directors and Shareholders often provide personal guarantees against business loans.
Make sure that if something were to happen, those loans would be paid immediately and your personal assets remain safe.
These can include:
1. Clearing your Lease Obligations
2. Repaying your Capital Account
3. Clearing any Business Loans and Debt
4. Clearing any Personal Guarantees
This policy can be Tax Deductible in many circumstances.
3. Protecting shareholders value and their families
Shareholders Insurance is there to Protect your business by ensuring that there is enough money available to buy the shares of a business partner who has passed away or is unable to ever work again.
This means that the business will stay in the hands of the remaining business partners. It also means that the affected family will get the full value of their shares should something happen as a result of:
1. Sudden Death of a Shareholder
2. Serious Illness of a Shareholder
3. Total and Permanent Disablement of a Shareholder