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Why Small-Business Owners Need Life Insurance

2/19/2018

When you own a small business, your family members aren’t the only people depending on you. Your death could be a disaster for your employees and partners, and it could destroy the company you worked so hard to build.
That’s the short explanation of why you need life insurance. But there’s much more you need to know.

Why you need it
Your family depends on your business’ income to survive. Further, you may have taken out loans backed by your family’s assets to start or grow the business. But your family members might not be equipped to take over the business if you die. They might also be unable to sell it easily. This could leave them without income or even in a position to lose their home, if that’s collateral for a business loan.

Life Happens, an insurance industry group, explains it this way: “When the family is forced to sell the business quickly, they may have to sell at a discount or during market conditions that make the business less attractive. In other cases, the business may be worth very little without the proprietor or partner.”

If you have partners, your family might be unable to step into your role, and your partners might be unable to quickly buy out your share, Life Happens notes. In this case, your family might have to help run the business during a stressful time or be forced to sell off the company. Finally, your business may rely on key employees whose deaths would seriously dent earnings or operations.

What you need
In each of these scenarios, life insurance could save your small business or protect your family. Each involves a different sort of policy.

A personal life insurance policy would help your family pay off any business debt and cover living expenses after your death. Your family would then have time to figure out what to do with the business.

If your business has multiple owners, you can combine life insurance policies on each partner with a buy-sell agreement. The agreement stipulates that on the death of a partner, the remaining partners can buy out the surviving family’s share at a previously agreed price. The life insurance pays for the buyout.

Finally, key person insurance is life insurance that protects against the death of a critically important employee. In the event of death, the insurance pays the owner or owners of the business.

Small-business owners may need several different life insurance policies. We have a number of companies and policy-types to protect your family and your business.

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Why is Commercial Auto Insurance so Expensive?

2/13/2018

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While the cost for most commercial insurance segments are going down, national rating agency Fitch Ratings says commercial auto insurance rates are rising at an accelerated pace. It also predicted that rates will continue to increase in the near future.

This news is probably making steam come out of your ears. Your Commercial Auto Insurance went up last year, and the year before that, and now it’s going up again! What? This may be especially troubling if none of your company vehicles has been involved in an accident for several years.

So, why are you paying More for Commercial Auto Insurance? From multiple insurance company’s studies, below are a few of the factors you cannot control that are driving up commercial auto insurance rates.

Some of these include:

A 3.3 % increase in year-over-year traffic
One-quarter of drivers are talking or texting
Medical costs climbed 1.5 times faster than other costs
More frequent and more costly crashes
Skilled commercial drivers are hard to find
New technology in vehicles means more expensive repairs

Again, you may have a stellar driving record and none of your commercial vehicles has been involved in an accident; but insurance costs get spread throughout the risk pool. To a certain extent, you are paying for other people’s mistakes.

Steps to Control Your Commercial Auto Insurance
The good news is that our insurance carriers are not all gloom and doom. Below are ways you can help keep your commercial auto insurance costs in line. You should start by:

Implement a program that communicates expectations to employees
Establish and enforce company policy on the use of vehicles
Hire drivers that meet medical and regulatory expectations
Know the risks when personnel use personal vehicles
Train drivers, Take them on a ride along, Let them drive a route
Regularly check employee driving records (we can do that)
Review every crash involving your drivers (drug test immediately after)

While you can’t control what other companies or drivers do, you can take steps to ensure your employees follow safety standards when they are behind the wheel of your vehicles. This will help you mitigate some of the costs you must pay. As an independent insurance agency, we can help put standards in place.

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Why Small-Business Owners Need Life Insurance

Why is Commercial Auto Insurance so Expensive?

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FOOD & BEVERAGE insurance​NEWS & VIEWs

Why Small-Business Owners Need Life Insurance

Why is Commercial Auto Insurance so Expensive?

Archives

Categories

FOOD & BEVERAGE insurance
NEWS & VIEWs