Do you need more insurance?
I’m still a start up. Why do I need Insurance now?
How Will Insurance Save My Business In The Start Up Phase?
“Enough is enough! I am going to run the show now and not take orders from anyone. I am going to start my own business.”
You have your ideas, you have created your business plan, and you’re out of the gate. Of all the insurance products available the most important is liability insurance. Typically, most business owners stop there. As you start your business, have you considered various other insurance products, such as, life insurance, critical illness and disability insurance?
What Will Life Insurance Support Me With?
Life insurance is something that all CEOs must consider. Even in the early stage of your business, not just when you hit “a particular mark” that qualifies you to think like a CEO. To get the business of your dreams started, or to progress to the next level you may have had to take out a loan, borrow money, or use existing assets as collateral. In other words, take on some debt. In the event of an unforeseen crisis, such as a premature death, debt is something you would not like to leave behind for your family or business partners.
You may have started the business to provide for your family or solve a problem that you were passionate about. Would you want your family to continue to be provided for in such circumstances? The proceeds derived from the insurance coverage will provide the necessary financial means to ensure that your beneficiaries and loved ones are able to thrive financially.
How Much Do I Need?
This is a more in-depth conversation and there’s no magic formula as everyone’s situation is different. At the very least, you want to have enough coverage to meet all the debts and provide at least one year’s salary for your family or business expenses. Remember, as the CEO and founder, you have built a high-quality business and service to the marketplace, and created an opportunity for your employees to provide for their families.
In the beginning stages a term policy with a conversion option will be sufficient. It will provide the necessary protection required at an affordable cost. As your business grows it would be sensible to convert to a permanent policy. This type of insurance vehicle would allow you to establish a lasting legacy.
Critical Illness and Disability Insurance
When running your business, you typically wear all the hats: CEO, COO, CFO, HR Manager, etc. Your work day extends from very early mornings through late nights. Sometimes your eating habits change because you are working around the clock. All these factors can lead to fatigue and a lowering of your immune system. This increases the potential for injuries and sickness. It is estimated that 225,800 new cancer cases and 83,300 deaths from cancer-related illness will occur in Canada in 2020. One in five Canadians aged 15 years and over have had one or more disabilities which has limited their daily activities.
The appropriate insurance protection will provide a level of financial security in the event of any unforeseen circumstance.
Final Thought
Consider this: savvy business leaders understand that a potential law suit should not be the impetus for securing liability insurance; they know that this insurance product will save their companies thousands of dollars in the event of any challenges in the future. This scenario also applies to the insurance products outlined above.