Every business, big or small, has important assets to protect and that means owners should consider insurance. Although insurance needs vary greatly and it’s best to get advice from a professional, a quick introduction to the types of insurance on the market is a good first step for business owners seeking protection from potential risks.
Insurance for Owners & Key Employees
There are a number of insurance products to help protect your business and your family. Life insurance protects your family in the event that something happens to you. This is especially important in the case of a sole proprietorship, because the owner is personally liable for all the debts of the business. Disability insurance provides income for a period of time, if you are unable to work due to an injury or illness. Partnership insurance or buy-sell insurance comes into play if your business partner passes away, allowing the surviving partner to purchase the shares and continue running the business.
Critical illness insurance provides a lump sum benefit if you are diagnosed with an illness. And key person insurance can protect your business against the loss of important employees, or yourself. Coverage is determined by how difficult it would be to replace a key individual, and what skill sets they possess, according to Mike Thomas, Vice President, Insurance Distribution at IG Wealth Management.
Property & Earnings Insurance
Business owners also need to protect assets in the event of an emergency that destroys part or all of their premises.
For example, property insurance will cover the property and buildings owned by a business in the event of destruction or damage due to things like fire or floods. Contents insurance covers assets stored at the business premises. If you run a business out of your home, you will likely need separate contents insurance for your business assets.
Business interruption insurance covers losses if your business is temporarily shut down. Finally, you will need vehicle insurance for any automobiles that your business owns as well as personal vehicles used for business purposes.
Dan Kelly, President and Chief Executive Officer of the Canadian Federation of Independent Business, has heard some unfortunate stories about business owners with no insurance or coverage that is inadequate. “I’ve heard a lot of heartbreaking scenarios,” he says. “Some entrepreneurs are left with nothing. Their family’s income stream stops 100 per cent.” And yet, for many business owners, “insurance is sometimes an afterthought,” he says. Yes, insurance costs money but protecting your business is worth it, Kelly adds.
Making sure you have the correct business insurance provides peace of mind for you, your staff and your family. To discuss your insurance options and find out what’s right for you and your business, contact a full-service financial planner.
Dwayne Rettinger, Investors Group Financial Services Inc.
This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Dwayne Rettinger is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant. Insurance products and services distributed through I.G. Insurance Services Inc. Insurance license sponsored by The Great-West Life Assurance Company.
