Your business is everything to you; it’s your passion and your livelihood.
But have you ever stopped to think what would happen if illness or injury meant you couldn’t work for a month, or even longer?
Statistically there’s a high chance you’ll get to find out, because before age 65 there is a three in five chance that you’ll be unable to work for a month (due to illness or injury), and a one in three chance that you’ll be disabled for 3 months or more.
The consequences of being unable to work and generate an income are probably fairly obvious: your ability to meet the day to day cost of supporting your lifestyle (and your family’s) will be severely diminished, especially if you have no savings to fall back on. Many people will start to struggle to meet their commitments after a couple of months, and at that point you may need to consider selling assets, moving, cutting back, or getting help from family or friends. It’s not something that bears thinking about.
Your business expenses don’t stop even if you do
On top of all this – and often overlooked – is the fact that many costs associated with running your business are fixed. For example, the rent on your premises, your vehicle lease, salaries of your staff, electricity, telephone, cleaning, business insurance; the list goes on and on. How would you pay those costs? And what would happen to your business if you couldn’t?
You may think you are protected but you probably aren’t
You may think that workers compensation, or your business interruption insurance, or even your income protection policy – if you have put one in place – covers these expenses, but they won’t.
A simple way to protect yourself, your business and your employees
Business expenses insurance is a type of cover designed to pay these fixed business expenses in the event that you are unable to work due to illness or injury. Think of it as income protection for your business, sitting alongside your own income protection cover, and leaving you in the best possible position to deal with the financial ramifications of you being unable to work.
|Fixed business expense||Covered under business interruption insurance?||Covered through personal income protection?||Covered through business expenses cover?|
|Rent, rates, taxes and insurance on your premises||✗||✗||✓|
|Utilities (power, internet, landline, mobile)||✗||✗||✓|
|Vehicle leasing, registration, insurance||✗||✗||✓|
|Leasing – equipment, tools, loan repayments||✗||✗||✓|
|Salaries of non income generating employees, including Super Guarantee and payroll tax||✗||✗||✓|
|Contracted costs (eg. cleaning, security, advertising)||✗||✗||✓|
|Other costs eg bank fees, interest on loans, business insurances||✗||✗||✓|
Business expense protection – an ideal partner for your own income protection
Your personal income protection is designed to cover up to 75% of your own taxable income from your business. But if you have fixed business expenses and you don’t also cover these, you’ve only got half the protection you need. Business expenses protection is the ideal partner to your personal cover, and will help ensure you still have a business to come back to.
Your next step is easy
Your specialist risk adviser can explain the benefits of Business expense protection in more detail, and determine whether it is appropriate to your circumstances. They can also put an overall protection plan in place tailored to your unique needs and budget. Keyperson offers business expenses protection from a number of Australia’s leading life insurers.
For more information, or to arrange an obligation free appointment, email Veronia at email@example.com or phone on 1300 785 577.