Business Expenses Cover
If you or one of your partners can't work for a while, will your business still make the same amount of money?
If the answer is 'no', your business could quickly run in to serious trouble – because your costs won't fall when your income does. You'll still have to pay your suppliers, your loan instalments, your taxes. If you have employees they'll still need their salaries even if the boss is sick and the turnover has halved.
Even the most profitable business can go down in a few months if the cash flow falters. Before you've had time to recruit someone to help or to subcontract your work you could be in arrears on all your accounts and losing the confidence of your suppliers, employees and customers.
Business expenses cover is ideal for small businesses or the self-employed, where the income of your business relies very heavily on the work of a few people. This type of insurance is similar to income protection for individuals: you can claim a monthly payment to cover your fixed costs, or to pay for someone to keep your business going until you are back on your feet.
Business continuity insurance is a short-term remedy to help you manage the repercussions of a serious illness or accident. If your business partner dies or their injury or illness turns out to be enduring, you would need to find a more permanent solution - either by claiming under key person or buy/sell insurance or by restructuring your business.
Business expenses cover can be bundled with any other business life insurance to provide a comprehensive package. Our life insurance specialists can answer all your questions about the business life insurance products on offer and help you understand and compare your options.
Business Expenses Insurance Case Study
No work and no play
Daniel, a 27-year-old skilled carpenter, was a keen football player. He played regularly, and one weekend suffered a serious knee injury. Although he didn't need surgery, the injury required 8 weeks of total rest, which meant he was unable to work.
Daniel was self-employed, so while he was recovering his business earned no income and was unable to pay his salary. With tax, business loan repayments and other ongoing business expenses, plus his own living costs to pay, Daniel faced severe financial difficultly.
The previous year, on the advice of his financial planner, Daniel had taken out both business overheads insurance and income protection cover. He was able to claim successfully on both policies and receive payments so he could cover all his own and his business costs until he was able to return to work. Without the insurance he would have been forced to continue working, risking permanent damage to his knee.
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