BUSINESS INSURANCE

It is life insurance on the key person(s) in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two. Consider the following

• The loss of that person’s expertise
• The cost of recruiting and training a suitable replacement
• The loss of clients or good working relationships that depended on that person’s ability or personality
• The delay or cancellation of any projects that person was working on
• Recall of any existing loans guaranteed by the key person

Contingent liability insurance is a policy taken out by a business on the life of an employee or director who stands surety for the debts of the business. Consider the following

• Is there enough liquidity to cover outstanding debt
• The impact on the business if there is no insurance to cover the debt

The business itself buys separate life insurance policies on the lives of each of the co-owners. The business usually pays the annual premiums and is the owner and beneficiary of the policies. Consider the following

• Is there enough capital to buy the shares out of the deceased estate of the co-owner
• If there is no cover the shares will devolve upon the beneficiaries of the co-owners will

Business Overhead Expense (BOE) disability insurance, also known as Business Expense Insurance, pays the insured’s business overhead expenses if he or she becomes temporary or permanently disabled. Consider the following

• A BOE policy pays a monthly benefit based on actual expenses, not anticipated profits
• Would you be able to cover overhead expenses if you as the owner is not able to work anymore