Should Your Partner Die, You Will Be Protecting Your Interest In The Business

Business.

Nine out of ten small business owners have no idea about small business insurance! - the forms of coverage you want depends on several factors: the size of your small business, how your small business is organized( sole proprietorship, corporation, partnership, llc) , number of employees, type of compensation you' re receiving( salary, commissions, fees) , nature of small business( service, product) , where it is located, and your exposure to liability. This is extremely important because your small business will, be worth nothing, more than likely when you die.

Things to ponder: Should you die prematurely, do you have enough life insurance to protect your family? - for example, the spouse of a deceased doctor or lawyer can only sell the tools of the trade, not the clients( the true bread and butter of any small service business) . But that' s not very likely, so you and every small service business owner should make sure that you protect your family with at least seven times your gross income. Get a crystal ball and see into the future to know when you are going to die then you could sell your small business before you kick the bucket. So, if you make$ 100, 000 per year then you should have over$ 700, 000 in insurance. What happens if you get ill or suffer an injury and can no longer run your small business?

If your goal is to have a member of your family take over your small business at your demise, are they capable( and licensed) to do so? - do you have disability insurance? The benefit may be taxable or non - taxable( depending on whether or not you deducted the premium as a business expense. ) Here' s an even more important question than anything we covered before: Do you have enough" business overhead insurance" if you have any at all? Disability insurance will generally pay about 60% of your income for a stated period of time. Who will cover the costs of running your small business( utilities, salaries, insurance) while you' re out of commission? If you have partners, do you have a Buy - Sell Agreement?

Unless it is an add - on, your small business overhead expenses will not be covered by your disability insurance. - should your partner die, you will be protecting your interest in the business. Do you really want your deceased partner' s relatives to take over their share of the business? Here' s a great example of this: your partner dies and his wife wants to claim her share of the business. Well, if you have this type of insurance coverage, you could avoid all of this interference by outside parties by simply buying out your partner' s share of the business. Do you have it? What about" disability buy - out coverage" ?

What would you do if a partner becomes severely disabled? - well, when you have" disability buy - out coverage" , you would never have to wory about this situation because after a period of time, your disabled partner would be forced to sell his share of the business to you. Would you simply keep paying him or her even though you are doing all of the work. possibly for months or even years to come? Of course, many of these situations may not occur, but it' s your small business. Decide which forms of coverage you deem most important. then speak to a professional who can give you the forms of coverage you want to protect your enterprise.