Risk Protection for Small Business Owners

[Benny Boy]

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In my line of business, I come across more and more business owners that have got all types of insurance to protect them from things like fire and theft, but have never thought to protect the business from the possibility that they get injured or die.

I am constantly baffled by peoples ability to value their stock and physical assets higher than themselves in running the business.

If you are a sole trader and a fire burns down your building, what use is replacing the stock if you are injured or die in the fire.

If you run a partnership, how is your partner going to find the money to buy out your half of the business if you can no longer work in it.

This same way of thinking runs into everyday life. What is the first thing you do when you buy a shiny new car? Get comprehensive car insurance….
If you crash your car and get injured, what costs your family more, replacing the car or your income?

For anyone out there who is running a small business or thinking about starting one, keep in mind that a small business is usually only good while you are around to run it…

Protect your family from having to deal with a business they are unqualified or uninterested in running by making sure you have the right contingencies in place.

[Anonymous]

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I think a lot of superannuation policies have an insurance component included. Is this what you mean? Otherwise people have personal insurance which includes loss of wage. Or life insurance. There is also workers compensation.

I nearly accidentally blew up a restaurant one time, but that is another story.

[Benny Boy]

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Yeah true most superannuation policies have some insurance underneath but default cover under super is very rarely suitable.

You would also be surprised how many people don’t have sufficient cover, including income protection (loss of wages).

Someone who owns a business with multiple partners, should have a buy/sell arrangement in place, which usually involves an easy transition of the business asset to the remaining partner/s in the event of death or disability combined with an insurance policy that ensures that the family of the partner who has died or become disables is compensated.
Without something like this, the remaining partners either need to find the money to buy out the business or retain the family member as a partner.

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