Insurance for Owners, Partners and Key Employees
The loss of a key person can devastate your business and your livelihood. These types of insurance can help protect your business and your family from potential risks:
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1. ____ Life insurance
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A. If you rely on certain key people to help run your business, you can take out key person insurance, so that your business will be protected in the event of the death of a key person.
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2. ____ Disability insurance
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B. Provides you with a lump sum benefit, if you are diagnosed with a critical illness.
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3. ____ Partnership insurance
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C. Will provide you with income for a specified period of time, if you are unable to work due to an injury or illness.
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4. ____Critical illness insurance
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D. If your business partner passes away, partnership insurance will allow you to purchase the shares and continue running the business.
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5. ____ Key person insurance
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E. 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.
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Insurance for Business Property and Earnings
You need to protect your assets and earnings in the event that a disaster or emergency destroys part or all of your business premises and assets. This could include:
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6. ____ Property insurance
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F. If you need to shut down your business temporarily due to a fire or other peril, this type of insurance will cover your loss of earnings until you are back in business.
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7. ____ Contents insurance
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G. This will cover the property and buildings owned by your business in the event of destruction or damage due to things like fire and other perils
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8. ____ Business interruption insurance
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H. You will need to insure any vehicles that your business owns. If you use personal vehicles for business purposes, be sure to advise your insurance company.
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9. ____ Vehicle insurance
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I. This covers the business assets that you store at your business premises. If you are leasing space for your business, the owner of the property probably has property insurance, but you are likely responsible for your own contents insurance. If you run your business out of your home, you will likely need separate contents insurance for your business assets.
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Liability Insurance
Mistakes happen. You, your employees, your equipment or your suppliers could make mistakes that ultimately end up hurting your customers, your employees or other people who are involved with your business. To protect your business from being sued, you should consider these types of insurance to limit your liability:
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10. ____General liability
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J. Provides protection if you are sued by a client for errors, omissions or negligence, when performing professional services.
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11. ____Product liability
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K. Covers injury to clients or staff on your premises.
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12. ____ Professional liability insurance
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L. Provides protection in the event that your products are defective or cause serious harm to those using them.
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Accounts Receivable Insurance
Having a client that does not pay can leave you in a difficult situation. You have to pay your employees and suppliers, and are essentially stuck covering the costs of goods sold, without the corresponding revenue. Accounts receivable insurance, also known as credit insurance, can help protect you from this risk.
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13. ____ A customer’s bankruptcy or default on payment.
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M. Your customer made an order, but now the shipment is sitting at the dock unclaimed. This could result not only in losing the money owed, but also in storage expenses or getting the shipment resold or returned.
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14. ____ A customer’s refusal to accept the goods as contracted
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N. Trying to get a reluctant or insolvent customer to pay can be a time-consuming and expensive experience.
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15. ____ Contract cancellation.
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O. You have work in progress to fulfill a contract for a customer, but the customer cancels the contract, leaving you with customized goods that cannot be easily re-sold.
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