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Business Insurance

Whether a large corporation or a small family owned operation, the success of a business is largely dependent on strategy, planning, and of course – hard work.  But there are few areas of planning that can sometimes get overlooked.  For business owners, these areas usually concern protecting and rewarding key employees and the financial planning it takes to successfully transfer a business to surviving family members or partners.  Business insurance can help ensure that all the effort and money invested in a business does not disappear when things do not go as planned. 
As a business owner, senior executive or key decision maker you have worked hard to build your business, and you know how challenging it is to compete.  You also know the basics of protecting your business.  Most businesses, for example, have basic forms of insurance, such as property, casualty, commercial lines, and liability.  If you have ownership in the business, you’ve probably also designated a person to transfer that ownership to. 
When a business fails, however, it usually has nothing to do with fires, floods, theft, or other disasters – or even with the knowledge of the person or partners to whom business ownership will be transferred.  Instead, it has to do with the life of your business – the people who make the business happen and the financial planning it takes to successfully transfer a business to surviving family members or partners.

The death of an owner could mean the death of a business.  Heirs of the deceased may insist on a job or an active role in management; they may insist on dividends being paid; they may sell their interest to competitors; or may force liquidation in order to obtain funds.  Employees may feel insecure about their jobs and look for new ones, leaving costly replacement problems.  Creditors may tighten up on credit if the firm’s financial condition is weakened.  Surviving owners may have no idea how much it will cost to buy out the deceased’s heirs; may have no cash for the buy-out; may find the business in total turmoil; or may have to hire outsiders to take up the extra work load. 

Insurance can help you protect and extend the life of your business.  Through key employee protection, employee benefit programs, buy-sell plans, and other arrangements, life insurance may provide valuable tax benefits and may help retain employees, protect the business from loss, and ensure that the business is transferred successfully.  

A buy-sell plan funded with life insurance may help the business avoid these problems by helping assure that funds exist to buy out a deceased owner’s heirs. 

When a key employee (a business owner or an employee who is integral to the operations of the business) dies, the business immediately loses that person’s business knowledge and experience. Replacing that knowledge and experience can be costly, time-consuming and sometimes fatal to a business.
Key employee life insurance is a protection plan for the life of your business.  A business needs protection from financial loss that may result from the death of a key employee, owner, or partner. Life insurance may provide immediate cash that can be used to off-set loss of profits and to hire a qualified replacement.  It also may help protect the company’s credit position; may provide a financial resource against a loss in business value; and may allow the employer to provide additional compensation to the employee.