What would you do if you became sick or injured and were unable to keep your business running?
It’s not something that is often thought about, but it is important to take a moment to consider it.
Did you know that 1 in 2 Australian men and women will be diagnosed with cancer before the age of 85? And that heart, stroke and blood vessel diseases (cardiovascular) diseases kill 1 Australian every 12 minutes?
These alarming statistics may make you think twice about covering yourself, and your business, for the unexpected.
If you were unable to work for 12 months, would your business survive?
A serious illness is debilitating and may require extended leave to recover. Are you aware of the total cost of all your business expenses every month? How would you pay for these expenses if something were to happen to you? It’s something that every business owner should consider.
Many life insurance companies offer business insurance solutions which are designed specifically for the self- employed or business owner. This type of insurance includes business expenses insurance which covers the fixed expenses of a business or practice that still need to be paid, even if the life insured cannot work due to injury or sickness.
Business expenses that you need to consider may include, but are not limited to:
- Regular advertising costs, postage, printing and stationery
- Electricity, heating, gas, water, telephone and cleaning costs
- Security costs
- Net costs of a locum
- Rent, property rates and taxes
- Accounting and auditing fees
If you become disabled, and depending on the type of policy you purchase, the benefit may be paid monthly over a period of 12 months. This period may be able to be extended if at the end of the 12 months the life insured remains totally disabled.
The type of policy you choose and the amount of cover that you need depends on you and your business needs.
Some people think that their income protection insurance is enough to cover themselves and their business.
The trouble is, income protection covers around 75% of your earnings derived through your business after expenses, which will help to cover your normal living expenses, but all the bills of the business also keep coming in. Premises and equipment leases, utilities and administration staff must continue to be paid.
The advantage of combining a business insurance policy with an income protection policy is that as well as receiving an income stream from your income protection policy, your net business expenses will also be paid. It’s a small price to pay for peace of mind.