What Ninety Percent of All Small Business Owners Don't Know About Small Business Insurance!

What sorts of insurance coverage do you require? Well that depends on several different factors. First, there is the size of your small business and how it's organized. Is it a one man sole proprietorship or a 50-employee corporation. Next, you have to take into account how you pay yourself and your employees. Do you pay a salary? Commissions? Then you require to think about your small business' location, your exposure to liability or law suits and whether your small business sells products or services.

Things to ponder:

Heaven forbid, but do you have more than enough insurance to protect your spouse and children? If you have a small service business, your small business is worth Zero when you die. Doctors and lawyers are the best example of this because when they pass away, the spouse can't sell the service or the clients (the real meat of the small business.) All they can sell is the equipment that was used for the small business. If you can predict when you might die, you could sell it ahead of time. Otherwise, all small service business owners should protect their families with a minimum coverage of 7X gross income.

But say that at the time of your demise, you want to have a family member take control of your small business. Well, there are two questions that you have to ask yourself. One, are they capable of taking over and, two, are they licensed?

What happens if you get ill or suffer an injury and can no longer run your small business? Do you have disability insurance? Disability insurance will generally pay about 60% of your income for a stated period of time. On top of that, your disability benefits could be non-taxable or taxable depending on whether you claimed the premium as a business expense.

Even more important is your answer to this question: Do you have "business overhead insurance"? While you're out of commission, who will cover the costs of running your small business like utilities, insurance and salaries? Your small business overhead expenses will not be covered by your disability insurance unless you include it as an add-on.

Do you have business partners? If so, do you have a "Buy and Sell Agreement"? Well, if you or your partner should suddenly die, your interest in the business will be protected. Example: your partner dies... his wife claims her share of the business. Is it in you best interest to have your deceased partner's family involved in the business? They may not know anything about how to run the business and cause huge headaches. Wouldn't you simply rather buy out your partner's share of the company? Well, with this additional insurance, you wouldn't have to worry about your partner's family interfering with your small business.

What about "disability buy-out coverage"? Do you have it? What would you do if a partner becomes severely disabled? Do you want to keep paying him (or her) for work he cannot do, possibly for years? Well, when you have "disability buy-out coverage", you would never have to wory about this situation because after a period of time, your disabled partner would be forced to sell his share of the business to you.

Now, none of these situations may ever occur but it is your small business to provide for your family as well as your small business. Now, all you have to do is speak to a professional to determine what sorts of insurance coverage you require to protect your small business.

Article Source: http://www.christiannotepad.com

Edward M. Brancheau created The Bank of Green to advise small businesses about subjects like small business life insurance and to help individuals build wealth through their mortgage.