Charles Goodman Group: Trusted Armonk Insurance Broker
When creating a business plan, a lot of emphasis is put on how the business will be structured and financed. Decisions are made about whether or not the business will be a partnership or a corporation. Financial options should be determined as well. However, many businesses fail to create a mechanism that allows for the transfer of equity and control of the business if one of the partners dies, if they receive a serious injury, or if they have a critical illness that prevents them from being able to carry out their duties.
Unfortunately, many viable businesses have been forced to close their doors because there was no written plan in place for succession, nor was there a funding agreement in place. Here is where having an adequate business insurance plan can help. Business insurance can be used in connection with a business’s plan for succession. Insurance funding is designed to protect the investments of everyone involved in the company, and it is also designed to guarantee that a business will function even if one of the owners or a key member dies. An Armonk insurance agent understands the complexities of this form of business insurance and is able to work with business owners as they devise a plan to minimize risk and protect their assets.
When discussing risk management with an insurance agent, it is first good to identify who the key people in the business are.
An insurance agent from the Charles Goodman Group of Armonk would be happy to answer any question you have about life insurance or property insurance.
Most businesses have more than one key individual. These individuals would be people who have the knowledge, the experience, and the leadership skills that are necessary in order to ensure that the business continues and grows. A key individual is anyone who, if they left the business, would cause adverse economic effects on the business.
When developing a business insurance policy, three areas require attention. They are asset protection, revenue protection and ownership protection. Asset protection includes not just the physical assets that a company owns, but also the key people who work at the business.
If a key individual dies, the business would likely need to sell some of its physical assets in order to generate the cash flow that it needs to stay afloat. This is especially the case if creditors become nervous and start to demand payment. The death of a key individual could also cause some debtors who had a personal relationship with the key individual to decide not to pay their debts.
Business owners must always be thinking about and trying to protect themselves from what if’s. Business insurance is an excellent way to limit exposure and reduce financial liability when unforeseen negative events like the death of a key individual occur.