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History Of Insurance

Summary Article By Pearlin Siow

Insurance improves your odds by reducing the financial consequences of unforeseen events beyond your control. Is your business equipped to handle emergencies like these?

A lifetime of work and dreams can be dashed if a key person is suddenly incapacitated. Your company may face a decline in profits because of the disruption in operations. Employee morale may hit rock bottom as they wonder about the viability of the company.

As you can see, insurance is a form of risk management essential to all businesses. Do not confuse business insurance with personal life insurance. If you have a spouse and children who depend on your income, then you should have personal life insurance for your family. Business insurance is for your company, not your family.

Business insurance is a complex subject and designing an insurance program that suits your business needs and risks is crucial. Here is a breakdown of some important insurance plans you should consider if you are a business owner.

Keyman insurance

Keyman insurance is simply life insurance on the key person in a business. How it works: A company purchases a life insurance policy on the key employee and pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. This will help the company survive the blow of losing the person who makes the business work. The company can use the proceeds to buy time as they find a replacement person, pay off debts, and basically tide the company through the hard times.

Credit protection insurance

You need money to make money. If you are not funding your business out of your own pocket, your money has to be borrowed from financial institutions. Even if the loan is taken by the business, whether it is a sole proprietorship, partnership or private limited company, this guarantee to the financial institution will have to be undertaken by the owners of the business. If proper risk management is not in place, your personal estate could be used to settle outstanding debts of the company. How it works: This cost-effective life insurance can be used to pay a benefit equal to your total authorized business credit. Benefits paid will first be applied to your business liabilities to the bank. You can opt for life coverage or accident coverage which will pay out the sum assured should the insured person suffer a covered loss.

How much coverage: It depends on how much credit you owe to the financial institution. Your life or the life of the other key person, including your spouse, can be insured.

Buy-sell agreements

Whatever you call it, a buy-sell agreement is vital to the livelihood of a business. In the event when a business owner dies or retires, a buy-sell agreement can enable his business to be as stable and well managed as possible. It ensures that his estate sells his business interest to those whom he has chosen. The owner's estate will also have liquidity by converting his business interest to cash. It guarantees a fair and reasonable price for his business or stock.

After your lawyer draws up the actual buy-sell agreement, your insurance agent can help you fund your buy-sell agreement with life insurance. Insurance ensures that there is cash available to do the necessary buyout. Ask your agent about cross-purchase buy-sell agreement funded with life insurance and stock-redemption buy-sell agreement funded with life insurance plans.

How much coverage: This depends on your business. Contractual retirement program

There are many ways to retain an employee's services and they include salary increments, employee share option schemes, better welfare and comprehensive medical benefits. How it works: This is essentially a pension plan that takes the form of an insurance policy. Companies buy into it to show that they care about the employee's retirement. This gratuity is flexible and the company can choose to give bonus payouts to the employee at regular intervals or a one-time lump sum at retirement. Most importantly, the funding of the policy makes minimum impact on the company's cash flow yet ensures returns when the employee retires.

Is the employee an investor and partner of the company? How much money did he invest? What is his contribution to the company? It has positive benefits and advantages for business owners. It can help you retain valuable employees, protect your company from sinking due to loss of a key person as well as protect your family and personal estate from creditors. Borrowing against equity in your life insurance plan is one way to raise capital for expansion and you can even use your policy to improve your bank credit.

Steps to getting business insurance:

1. On a sheet of paper, list all the possible risks you face. Evaluate the losses you will suffer from each one. Cover your largest loss exposure first.

2. Ask business associates for referrals. Select an agent or broker from a reputable firm who is experienced in business exposures and the commercial insurance market.

3. Get several quotes or proposals and have them in writing so that you can compare the plans.

4. As you shop for your insurance, you will see special terms and concepts unique to business insurance. Ask your agent to explain anything that you are not familiar with.

5. Buy a policy that fits your budget and addresses your most pressing need.

6. Ask your agent to deliver the policy, review them with you and answer any questions that you may have.

7. Avoid having similar insurance but do not short-change your business with less coverage than you actually need. 8. Review your program periodically. The coverage you start with may be inadequate for the amount of business you are doing after six months.

Business Insurance Leads, Building Relationships

Summary Article By Jay Conners

If you are an insurance agent that is looking for insurance leads, more than likely you are looking for policies in the area of auto, home owners, or life insurance. Due to the fact that most business insurance customers are seeking insurance policies for start up businesses where the premiums are not all that high, the business insurance lead is not highly sought after by insurance professionals.

Also, for these same reasons the customer in need of business insurance has trouble finding someone to fill their business insurance policy for them.

Here is something for Insurance agents to consider when it comes to working with business insurance leads.

If you take the time to help a customer out with their business insurance needs and take the time to build a relationship with them, in no small way will they be overly appreciative of the fact that you took the time to help them.

Which of course leads to life insurance, car insurance, home owners insurance, etc.

Also important is finding the right insurance lead company to work with.

Look for the insurance lead companies that sell fresh, real time business insurance leads, and one with which you can start out with a low minimum deposit.

Check out information of business auto insurance, business car insurance

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