A typical scenario involves starting work early in the day, finishing late, spending dinner with family or relationship partner and then working late into the night to complete accounts, pay bills, quote on jobs, etc.
Is this you?
One of the traps of starting and running a small business is putting off or delaying decisions that are important for you to protect your personal, family and business situations. A lack of action can have a substantial negative impact on an owner’s personal and family situation when an unexpected “triggering event” occurs in the business.
Ian recently started a trades business. His family was very supportive of his decision but had some concerns initially due to their high mortgage repayments and kids schooling requirements. Whilst completing a customer’s job, Ian had a major accident that rendered him unable to work for 3 months. Ian had forgotten to purchase insurance. Ian had to draw down on the family’s entire savings and the equity in their home until he was able to return to work.
Are you at risk from a triggering event?
A triggering event is one that occurs which significantly impacts on your personal, family and business situation. Small business owners can take preventative action to minimise the impact of a triggering event. The table below lists examples of potential triggering events and suggested preventative actions:
How much insurance do you need?
Purchasing insurance is one way of minimising your risk from a triggering event occurring.
Typically small business insurance usually includes:
- Key Person Insurance to provide for a lump-sum payment if death occurs.
- Sickness and Accident Insurance to replace a loss of income.
- Trauma and Permanent Disability Insurance to provide for lump-sum payment if a traumatic health event occurs which causes disability.
What’s important when purchasing insurance is to make sure you have sufficient insurance to cover your personal, family and business situations. Your Financial Adviser is usually best positioned to provide advice on your insurance requirements. When meeting with your Financial Adviser make sure your adviser adequately assesses your current and future needs.
For further information regarding balance and how to best achieve it in your business, please download our factsheet How long can you afford not to work or contact OBT’s friendly team on 07 5462 2277.