Do you own a business? Have you thought about your life insurance policy? Many business owners, especially sole traders, may skip over life insurance as they believe it’s included in their superannuation or it’s too costly to take out. But is it too costly to ignore, especially when dependents and spouses are involved?
Life insurance isn’t just insurance against accidental death. It also includes other coverage such as Total and Permanent Disability insurance, trauma or illness insurance, and income protection insurance. There are also critical business insurance policies you should consider, if you haven’t already.
Here are the differences between all these policies and how they can protect you, your family, and your business.
Life Insurance and Income Protection
As we mentioned, life insurance is an umbrella term for lump sum or periodic payments to a claimant in the event of death, permanent injury, or loss of income. For business owners who rely on their skills to make a living, illness or injury could rule them out of making a living for some time. Having income protection insurance can pay up to 85% of your regular income while you recover. Trauma or permanent injury insurance can cover you if you are unable to work again. There are many levels of coverage and exclusions, so make sure you get as much information as possible. Here are some tips for making a choice about which level of life insurance is suitable for you.
Management and Professional Indemnity Insurance
If you are a director or trustee of a company, you are responsible for employment practices, government fines, cyberattack liability, and even private capital raising. If you are accused of negligence in your conduct or advice, you may be threatened with legal action. Management insurance as well as professional indemnity insurance can cover breaches of contract and other actions you may be liable for as a business owner. Other types of business insurance you should consider include cybercrime insurance, product liability insurance, and asset or property insurance.
Group Personal Accident and Public Liability Insurance
If you work in a risky trade or business, you may want to take out group personal accident insurance for yourself and your employees. This covers the costs of medical bills and lost income due to time off work. To ensure you cover your business for injuries incurred by the general public, you should consider public liability insurance. This covers the costs of legal fees and court actions if a member of the public should injure themselves in your place of business.
Is Life Insurance Worth It?
All types of insurance mentioned above are well worth it if you want to minimise a risk of loss of income, legal costs, or other unfortunate events which can cripple cashflow, harm employees’ livelihoods, or shutter a business for good. To ensure you are covered, ask a financial adviser or insurance broker to determine what policies are right for you and your business as a whole.