When considering insurance needs for the self-employed, some of the important areas to be addressed are:
- That there is sufficient insurance proceeds to pay out all debt (Loans)
- What director/business owners guarantees have been given, have personal assets (family home) been used as security for business debt? – and what would happen in regards to those guarantees/personal security in the event that the business owner/s passed away or could not return to work either in the short-term or permanently?
- Is there a current lease in place and would the business owner/or his estate be able to afford to meet those lease commitments in the event of them passing away or unable to work for a period of time due to sickness or injury?
- If the business owner was unable to work for a period time is there sufficient funds to employ a manager/replacement/locum to keep the business running, and in the most extreme case in the event that a business owner passes away or cannot return to work again, is there sufficient funds for the family or his estate to maximise the value of goodwill?
- When there are multiple business owners, how would the existing business owners be able to buy out an exiting owner/owners estate in the event of them passing away or never being able to return to work again? In addition, how long would the existing owners be comfortable in paying an owner who was unable to work though sickness or injury for the medium to long term?
