Consider the family that’s lost not only their primary breadwinner, but the business that had sustained their lifestyle. Why did they have to sell their home and move? One common thread in these situations is usually the deceased did not have business insurance.
Isn’t it challenging enough to succeed? Most entrepreneurs skip the idea of life, disability and key person life insurance because at the early stage they really don’t know if their new business model will succeed. It’s difficult to think about insurance when you’re younger, healthy and for the moment in complete control of your business. But if you’re a strategic thinker, you should consider the benefits.
Personally, I can speak to instances where a whole life policy allowed the owners to withdraw cash to help support a serious working capital deficiency. They had looked forward several years, and thought life insurance made sense to provide a safety net if a worst case scenario were to unfold. Lo and behold in this circumstance they could avail themselves of the benefits of their policy without experiencing a family tragedy.
Here are some points worth contemplating when considering insurance for your business:
Various insurance products can alleviate the risk of the aforementioned and the cost is a deductible business expense.
Creditor Insurance for example, covers a business’ debt. Insuring your lines of credit or mortgages is another cost-efficient way of protecting business survival in the event of a tragedy. Nearly all financial institutions offer such insurance.
Now’s a good time to talk with your insurance advisor or financial mentor, to explore insurance options for your business.
Roger Downie is a Commercial Account Manager with BMO in Kamloops, B.C.