Courtesy of iii.org Many businesses—especially small businesses with fewer employees—depend on a single person or a few key people for their success. If a key person becomes unable to work or dies, the business might lose valuable accounts or be temporarily unable to operate, resulting in lost revenue. The loss of an important employee can hurt the morale of a business, but the financial impact can be mitigated if a business purchases key person insurance. This type of coverage can enable a business to continue paying its bills and fund the search for a new employee. In unfortunate instances where a business cannot survive without the key employee, the funds from key person insurance can be used to pay severance to employees, distribute funds to investors and close the business in an orderly manner. Key person insurance is usually owned by the business, which pays the premiums. This coverage is also a requirement of most banks and lending institutions when applying for financing …
Business Insurance
Business Owners Insurance Policies
Courtesy of iii.org It may sound like a dance craze from the 1950s, but a BOP—a Business Owners Policy—can protect your small business against today’s most common risks. Fire, burglary, liability and business interruption losses are all covered under a BOP. Since a BOP is prepackaged, there is only one policy to review and it can be more cost effective than purchasing separate policies. Additional coverage can be added in the form of endorsements or riders. Since a BOP insurance policy is specifically designed for small and medium-sized businesses, the type of business can influence eligibility. Normally, companies with 100 employees or fewer and revenues of up to about $5 million or less are candidates for a BOP. Some types of businesses, such as restaurants, may be ineligible for a BOP because of the specific risks inherent in the business and may need to consider buying the individual coverages separately. Combining three insurance policies into one package In a single, …
Business Interruption Insurance, Do I Need It?
Courtesy of iii.org Business interruption insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy. A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential. Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the revenue you would …