Business insurance can be essential when disaster strikes, and to protect their assets, most business owners invest in liability coverage, commercial fleet insurance and policies that cover specific capital assets. Unfortunately, at the same time, many business owners forget to prepare for the very worst.

Namely, what happens if you or one of your employees dies? What happens if you have to close down the business? To prepare for these scenarios, you may want to consider the following three types of coverage.

Life Insurance

Whether you are a business owner or not, life insurance is essential, especially if you have a family that relies on your income. To ensure your family can handle the loss from a financial standpoint, you should invest in a life insurance policy.

Ideally, it should cover the income you expect to draw out of your business for at least the next ten years. That said, in some cases, you may want even more coverage than that — for example, if you have toddlers or babies at home, you may want a policy that covers 20 years of projected income plus enough for their university educations.

Key Person Insurance

Your employees can be the most valuable asset to your business, and in some cases, there may even be a few key employees that really keep things moving forward. Although it may feel slightly morbid, if you want to truly protect your company's longevity and success, you should think about what would happen if one of your key employees died.

If you know that you could objectively replace that person quickly without a lot of strain on the company, you don't need a key person policy for him or her. However, if you identify workers whose loss would mean shutting down the business for a few days, weeks or months or whose death would cause major delays to key projects, you may want to look into a key person policy for that individual.

A key person policy is an insurance policy that gives the business a payout upon the key person's death.In the interest of parity, you may also want to offer employee life insurance. That is a compelling perk for many employees, and it ensures their families also get a payout if they die.

Income Protection Service

Finally, you may want income protection insurance.  If your business shuts down, this ensures that the money keeps coming in. As a business owner, you want an agreed-value policy. These are slightly more expensive than indemnity policies, but they ensure that you secure your current income level.

For more information, contact companies like National Corporate Broking Pty Ltd.

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