Business Insurance

Business Insurance mitigates risk to businesses and provides stability, in the event of unforeseen circumstances such as death or disablement of owners, key people or guarantors. This allows businesses to trade through unfortunate events with protection of assets and revenue, while also allowing for smooth and equitable resolution of ownership issues. Econ Insurance Services can help you navigate the highly specialised nature of this field, developing a risk plan uniquely tailored to your business.

How it Works

Business Insurance is intended for businesses that plan to continue trading after the death or disablement of the nominated key person. The insurance may be purchased by the business, or individuals within the business, depending on the purpose. Business Insurance is purchased in addition to other forms of personal insurance, such as Life Insurance.

Asset Protection Insurance enables a business to repay loans of a company upon the death or disablement of a key person or guarantor, allowing the company to retain its assets (including property, equipment and acquisitions), and to protect any sources of guarantee (such as the family home). This is critical in the event that loans are called in by banks or lenders.

Ownership Protection Insurance helps fund equity transfer between the business owners upon the death or disablement of an owner. This ensures that the business can have a clear ownership and leadership structure going forward. This is particularly critical for partnerships, allowing the surviving partner(s) to buy out the shareholding from the family/benefactors of the former partner if needed. It also allows family businesses to be equitably restructured among the remaining family.

Revenue Protection Insurance helps to stabilise business revenue and to meet replacement costs, in the event of death or disablement of a key person. The key person often has unique skills or knowledge, requiring extensive training or hiring of staff, or even closures of certain aspects of the business. Customers may also switch to other businesses in the absence of the key person. Revenue Protection Insurance helps provides a stable revenue flow while these issues are resolved.

Benefits of Business Insurance

Business Insurance provides stability and protect for the owners, shareholders and staff of a business, and their families.

  • As a key person, in the event of your death or disablement, you can ensure your family will either have steady ongoing business revenue (via Revenue Protection and Asset Protection), or their stake can be smoothly acquired by remaining business partners (via Ownership Protection).
  • As a business owner, in the event of the death/disablement of a partner, you can quickly and safely resolve the business structure,with insurance allowing you to buy out the stake of your partner’s family or benefactors, while also protecting revenue and assets.
  • As a business owner, in the event of the death/disablement of a non-owner key person (such as a director, or key manager or staff member), you can insure against losses in revenue or loans being called in.
  • For staff of a business, Revenue Protection and Asset Protection allows the business to continue trading as a going concern, protecting their jobs. This also helps mitigate the effect of uncertainty on the business’ revenue.

How We Help

Business Insurance is one of the more specialised types of insurance, as it is highly dependent on the current structure and position of your business.

Econ Insurance Services takes the time to fully discuss and study your business, and the risks you face from the loss of a key person.

We can help with the following:

  • Identifying your current ownership structure, and the proposed structure on the death/disablement of particular key persons. This includes understanding the family and benefactors of the key persons.
  • Examining the current assets, revenue streams and liabilities of your business. This includes property and equipment owned by the business, as well as  outstanding loans.
  • Determining the skills, contributions, health status and financial positions of key owners and leaders, and how revenue may be affected by their loss.
  • Determining the level of insurance required for remaining parties to buy out the share of a deceased/disabled key person, and proposing Ownership Protection Insurance to cover that.
  • Creating an insurance plan to provide for Revenue Protection and Asset Protection, based on  assets, revenue streams, liabilities and the individual contributions of key persons.

Through our partnership with Economos Chartered Accountants, we can engage our in house tax lawyer for advice on the tax implications of Business Insurance, including tax deductibility of insurance premiums, and Capital Gains Tax.

Fee Structure

We offer our strategic advice and tender services using a transparent fee-based schedule, which takes into account the size of your workforce, the specific services requested, and the term of ongoing support. This is in addition to the insurance premiums paid to the insurer, from which we will receive a commission for our product placement, review and claims handling services.

Learn More

If you would like to learn more about how Business Insurance can help protect your business, please contact us at Econ Insurance Services. We will be happy to sit down with you and discuss the risks faced by your business, and how to mitigate those risks.