Most people will agree that individuals need disability insurance to protect
their incomes. But have you thought about DI for businesses? A business
can lose income due to an accident or illness, just a like an employee can.
If the owner, or key person becomes disabled, how will that impact the
bottom line of the business they own or work for? How will they keep all
their employees on payroll with businesses that are opened reducing
hours. What would happen to their business if the doors could open but
they weren’t able to drive revenue into the business? How long would it
stay open?
Think not only about the dentist if they can’t see patients, but how long can
they pay the receptionist and hygienist? Also think of the contractor if they
can’t go do estimates. How many jobs do they have lined up and when
would the business suffer? Think of the local bakery if the owner / baker
can’t come to work? How will they pay for a temporary replacement or will
they have to close? Ask your business owner clients what would happen to
their business if they couldn’t go in and unlock the door each morning for 6
months, would the doors be opening a year from then? How long could
the business continue to make payroll? The answers probably won’t
surprise you.
So, what can we do to help business owners in this situation, where
business interruption insurance won’t help? There is Business Overhead
Expense (BOE). BOE pays a benefit directly to the business for covered
expenses, like most of the payroll, rent, insurance, utilities, supplies so the
business can remain open while the owner is disabled so there is a
business to return to when they recover. Having BOE means the owner
does not have to worry about payroll, having to lay off valuable employees.
The rent, phone bills, internet, equipment leases will be paid with the
benefit that is paid directly to the business to keep the business afloat
during those times.
In the case where the person driving revenue into a business is not an
owner (think lead sales person) we can look at key person insurance that
will do most of the things BOE will, but cover the key person.
Let’s talk today about how you can help your business owners protect their
business if they become ill or are injured.