Business insurances

Shareholder & Asset Protection • Key Person • Trust & Will Guidance  • Debt Replacement Insurance  • Good Advice

The role IBG plays initially is to meet with business owners to identify unexpected events that may occur and formulate strategies to provide solutions should the unexpected happen. This process will involve discussions with the business owners legal and accounting advisors in areas such as trusts, wills, enduring power of attorney, share purchase agreements, key person documents and debt protection. We would also view existing insurance documents to confirm that the correct products are in place and the ownership has the correct designation.

What will happen to the business if a shareholder, partner or key person either dies unexpectedly or becomes medically unfit to work is something that is often overlooked when insuring your business. Circumstances such as these can threaten the ability of a business to continue operating. For example:

  • Who will now own the deceased or disabled shareholder/partners share of the business?
  • How will the purchase of their share of the business be funded?
  • Who will be liable for business debts? In circumstances where personal guarantees have been signed for these debts the loan documentation will usually state that the guarantors are jointly and severally liable. This means that the surviving shareholders/partners will become liable for the business debt.
  • What happens to business income if a person who is key to the success of the business dies or can no longer work due to serious illness?

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The following insurance solutions can provide the cash resources necessary in these circumstances.

Life and Permanent Disability Insurance
Can provide funding for the purchase of the deceased or disabled shareholder/partners share of the business and his/her share of business debt.

Trauma or Living Insurance
Can provide funding to cover such things as:
– Loss of revenue through a key person’ s absence through serious illness
– A shareholder/partner’s share of business debt

Key person Insurance
Can provide a monthly cash injection to help cover
– Any short term fall in profit due to the absence of the key person
– The cost of a locum to fill the key person’s position
– The costs associated with employing a replacement

Business Income Protection
Will provide an income where sickness or disability prevents you from working and can cover such things as
– The cost of a replacement employee for up to 24 months
– Assistance with re-establishing your business once you return to working
– The cost of some of your fixed expenses

Note: For business insurance solutions to be effective, they often need to be supported by agreements which state what is to happen should any of the insured events occur. We can assist you with these.

Business Protection Insurance – Continuum Cover
IBG works with business owners & their financial advisors to protect small to medium sized businesses from unexpected succession events that force a business owner or part owner to have to exit their business e.g. business partner suffers a serious illness / disablement / death. IBG identify & formulate strategies to ensure that the appropriate people had access to sufficient funds to

(a) Remain in control of the business

(b) That the person or estate of the person exiting the business receives fair value for their share of the business asset created.

Click the link below to request a copy of the book – Would Your Exit Plan Survive The Unexpected.

info@ibginsurance.co.nz

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