A business is only as good as its people.
Although you may have implemented plans to protect your buildings and equipment, it's important you don't forget about protecting one of your most important assets - your people.
Losing an owner or a key person who plays a fundamental role in the operation and growth of your business could have a devastating impact on your business.
Business protection can help reduce this impact - choose from a range of options to build a flexible cover that meets your needs.
If you, a co-shareholder, or a key person whose skills and knowledge are vital to your business' success, died or suffered a serious illness or injury and was unable to work, consider some of the areas this could impact your business:
Revenue: A direct impact on sales can occur due to loss of a staff member who is fundamental to driving growth. This could be a top salesperson or a specialist whose skills and knowledge would be difficult to replace.
Expenses: You may incur additional costs associated with replacing a key staff member, such as recruitment and training. Or, because of lower sales, you may need the financial assistance to ensure fixed expenses are still covered.
Relationships and contracts: You may experience the loss of key clients or a critical supplier if you lose a staff member who manages key relationships
What covers are right for your business?
There is a range of business protection options to choose from:
Business expenses cover: Receive funding to help repay your eligible business expenses such as business rent and power or to help cover the cost of a temporary replacement for you in your business if you're unable to work due to illness or injury.
Key person protection: If you or a key person is unable to work due to illness or injury, you could receive a monthly benefit up to an agreed value to help keep your business running. You can also take trauma, life or disability insurance over your key person and receive a lump sum payment at an agreed amount.
Shareholder protection: Shareholder protection insures each shareholder for the value of their shares. If they die or are permanently disabled, the other stakeholders receive a lump sum payment to ''buy out'' the departing member's shareholding, according to the stipulations of the "Buy Sell" agreement.
Debt protection: If your business has debts, you may not be able to continue contractual repayments if you or a key person became disabled, died or suffered a specified major trauma. With trauma, life or disability insurance you could receive a lump sum payment at an agreed amount to help meet your business' debt obligations.
How can an adviser help?
To make sure you have the right protection for your business, it's good to talk to an adviser. An adviser adds value by identifying your priorities, balancing your risks, offering options.
Advisers also provide ongoing support to ensure you continue to have the right cover in place when circumstances change. They will also continue to keep in touch, and if the time comes to make a claim, you can call your adviser for help.
Their knowledge and experience can make all the difference at a stressful time.
Your business protection can be purpose-built to address the areas of risk that most affect you.
• Trudi Vossen is an Authorised Financial Adviser at Stewart Financial Group. Stewart Group is a Hawke's Bay-owned and operated independent financial planning & advisory firm based in Hastings. The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed, or relied on, as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any investment decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz