Does Your Insurance Still Cover Your Business Needs?
Once you’ve got it, you often don’t give your insurance another thought until you need to make a claim.
However as your business changes, it’s easy to outgrow your insurance.
If you have made some big changes recently, like expanding your business, or taking on a new partner, you may need to reassess your insurance. As your circumstances change, so do your insurance needs.
Not updating your insurance can leave you vulnerable when you need it most.
Sound familiar?
Do any of these events sound familiar to you? If you’ve recently made changes to your business, like those below, it could be time to review your insurance.
- You are expanding your business
- You have a new business partner
- You have taken out a large loan
- You have taken out a personal guarantee
- You are employing new people in your business who are crucial to its operation
- There is a change to your business structure
- You are leasing new equipment / premises
Why is business insurance important?
Running a business is hard enough without adding the complications of injury, illness or even the death of a business partner or key person.
That’s why every business should include business insurance as a matter of course. Important areas for every business owner’s consideration include protecting any business loan, succession planning and business expenses.
Businesses with two or more owners should consider what might happen to the business if one of the owners dies, becomes totally and permanently disabled or suffers a terminal or traumatic illness.
A business generally depends on a few people to produce the profits, provide the capital or manage the business. If there is no viable succession plan, there may be significant financial hardship for the surviving business owners, as well as for the surviving family members.
Business insurance is a specialised area of insurance which involves undertaking a full and detailed interview with a financial adviser to determine the best plan for your business, including:
- needs of the business
- amount of insurance necessary to satisfy these needs
- cost of the insurance
- prioritisation of the business needs and insurance (having regard to the cost) and
- requirements necessary for the amount of insurance proposed
Talk to IAS about identifying your businesses needs. The goal of business insurance is to provide a funding mechanism. The funding can help the business to financially survive a key person crisis. A business that has business insurance in place may also demonstrate to creditors, shareholders and employees the principles of sound financial management and planning.
(Source | Comminsure)
