Category: business insurance

Banking on Yourself for Your Business

Change is inevitable both in life and in business.

We prepare for life’s changes by saving money, buying insurance, and so on. Owning a business is no different, in fact it is even more important for the small business owner to protect themselves from change so they can continue to bring value to their clients.

While there are many different seasons for a business and various strategies to cope with changes, one extremely important factor that affects a business’s ability to weather any storm is adequate cashflow.

For example, one common trend is the expansion and contraction cycles of the economy. Right now, we are seeing high inflation and although we are not technically in a recession, many of us are feeling the pinch. Having adequate cashflow can ease struggles like this.

Y0u are probably asking, “what does this have to do with insurance?”. Insurance is designed to protect, and one of the best ways to protect against the ups and downs of cash flow is to create your own bank. This can be done with cash value life insurance.

There are several types of cash value life insurance and although each product is slightly different to support different needs, they are all based on the same principle. All cash value life insurance policies throw extra money in the form of elevated premiums into investments or investment indices. This in turn yields returns based on the stock market.

The best programs are indexed off the market, meaning that when the economy soars you participate in the growth, when it contracts your accrued money does not diminish. This strategy has been used by some families over the last several decades to build generational wealth.

In the hands of a business owner this strategy can build a very robust emergency savings plan for smoothing out the ups and downs in the economy as well as be instrumental in weathering big changes in the business environment such as the recent COVID19 pandemic. Additionally, because it is life insurance, it can be used in the event of the death or disability of the owner or a key employ as well as ensuring equity in dissolving a business partnership.

To set up an effective program, it is important to consult with an insurance professional. You should also consult with a business continuation specialist to get a more in-depth analysis of how to keep your business going through the variety of changes that we all encounter. For starters check out this article by Patty Bonsera.

If you do not have a good insurance professional on speed dial and want more information, reach out to my office at 719-247-0008.

The Coverage Your Business Needs

In our world today there are a variety of threats to businesses especially small businesses. Top of everybody’s mind is COVID, which is typically not a risk insurers will cover at least in the traditional sense. However, there are other risks that business owners think little of until it is too late.

There are three areas of coverage that most businessses need but tend to be under covered in. The first is cyber liability coverage, secondly, employment practice liability coverage, and lastly, key person insurance. There are others that are more industry specific and I will touch on those in the future.

Everyone knows that cyber attack is a ever present threat. The nightly news regularly has spots about large corporations that have gotten breached by cyber criminals. Most small business owners seem to think it only affects major chains, but the reality is major chains are the only ones that live to tell about it. As a small business owner the smallest breach can cost tens of thousands to correct and repair. The process is very complex in addition to being expensive and drives many out of business. If a company has a brick and mortar, does e-commerce, or takes credit cards at all they need cyber protection.

Employment practice liability is applicable to anyone who has W-2 employees. We live in a very litigious society and even the best of us make mistakes in managing our staff. Employment practice liability protects the owner from lawsuits arising out of accusations of wrongful terminatilon or other discriminitory conduct. Beware however, that in this time of COVID insurers are very wary of covering businesses for this particularly because so many have been laid off and hence lawsuits for wrongful termination are more likely

Key person insurance is the best way to cover your business from loss of certain key employees due to disability or death. This insurance is not subject to the same limitations that other coverages have when dealing with pandemics. If you have key person insurance in place, then it wouldn’t matter what disabled or killed the employee, the fact that they could no longer work triggers a payout to the business to replace that individual. This insurance is incredibly powerful as it can help businesses of all sizes and varieties.

To ensure these coverages are on your policy you should consult your agent. If you need an agent, I am happy to review your policy with y0u. Simply fill out the form below and my office will be in touch.