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Business Risk Strategies

Protecting your business is paramount. Business Risk Insurance is a crucial element of any comprehensive business plan, designed to safeguard your enterprise from the financial fallout of unforeseen events. It's not just about protecting your assets; it's about ensuring your business can survive and thrive even in the face of adversity.

These business risk insurance strategies are often built upon the foundation of personal risk insurance products, strategically structured to address specific business needs. A well-tailored Business Risk Insurance strategy can provide coverage for a range of potential threats, including:

Key Person Insurance: This covers the financial loss your business would suffer if a key employee – someone with unique skills, knowledge, or client relationships – were to die or become disabled. It can help cover the costs of finding and training a replacement, as well as the potential loss of revenue.

Buy/Sell Insurance: This specialized insurance facilitates a smooth transition of ownership in the event of a partner, co-owner, or shareholder's death or disability. It ensures that the remaining owners can afford to buy out the departing owner's share, preventing disruption to the business and providing fair compensation to the deceased or disabled owner's family.

It's crucial to understand that if these business insurance strategies aren't structured and owned correctly, significant issues can arise.

For example, if key person insurance isn't owned by the business, the payout may go to the key person's family instead of the business itself, leaving the business vulnerable. Similarly, buy/sell agreements must be carefully drafted and funded with appropriate insurance policies owned by the correct parties to ensure they are legally enforceable and financially viable. Improper ownership or inadequate coverage can lead to disputes, financial hardship, and even the collapse of the business.

Developing a robust Business Risk Insurance strategy requires a thorough assessment of your specific business risks and circumstances. It's about identifying the potential threats you face and creating a plan with the right combination of coverages, correctly structured and owned, to protect your investment and ensure the long-term viability of your business.

Personal Insurance Solutions

At Regional Financial Planning, we understand that your loved ones and financial well-being are of utmost importance. That’s why we offer comprehensive Life Insurance, TPD, Trauma and Income Protection solutions tailored to your unique needs.

With us, you can build a secure foundation for your future, ensuring peace of mind for you and your family

Life Insurance
Pays a lump sum benefit amount if you die or are diagnosed as being terminally ill. Life cover is available inside and outside superannuation. There are tax deductible benefits (personal contributions) with paying your life insurance premium inside super, however there could be taxation concerns if that benefit is paid to certain beneficiaries. We can also look at using your Superannuation Accumulation balance to reduce your overall need for insurance to help reduce premium.

The benefit amount may be used to pay off the mortgage and other outstanding debts, provide a lump sum that could be invested to provide an ongoing income stream for dependents, or help with estate planning and business buy outs.

Trauma Insurance
Pays a lump sum benefit amount if you are diagnosed with a specified trauma condition (Cancer, Heart Attack, Stroke and other serious neurological conditions) and survive 14 days from the date of diagnosis.

The benefit amount could be used to help pay for out-of-pocket medical costs and cover short-term loss of income. This can allow you to focus on recovery rather than worrying about the bills.

Total & Permanent Disability (TPD) Insurance
Pays a lump sum benefit amount If you become totally and permanently disabled because of sickness or injury and are unable to work again or meet certain criteria. TPD Cover is available inside and outside superannuation.

There are tax deductible benefits (personal contributions) with paying your TPD insurance premium inside super, however there could be taxation concerns which will need to be considered when developing the sum insured.

We can also look at using your Superannuation Accumulation balance to reduce your overall need for insurance to help reduce premium. The benefit amount could be used to pay off the mortgage and other outstanding debts. You might also use this to cover the costs associated with a long-term disability such as funding future children education expenses, full-time/part-time care, or modifications to your home.

Income Protection
Income Protection is designed to replace up to 70% of your gross income in the event of sickness or an accident (injury). This is paid as a monthly benefit in arrears after you serve a waiting period.

Please note, the monthly benefit is a taxable amount and may impact your actual income needs. We can insure 100% of your employer made contributions to Superannuation on top of this amount.

There are some specific booster options (at an extra cost) that can allow for an increase of benefit to 90% of income for only 6 months. Income Protection is available inside and outside superannuation, however there are ongoing concerns with features and definitions for superannuation held policies.

Your waiting period is determined by the amount of assets you are willing to use (self-insurance) or how much leave entitlements you may have. The longer the waiting period, the lesser the risk to the insurance company which can result in a lower premium.

The benefit period is the length of a time a claim can be paid. Short (2 years) or medium (5 years) term benefit periods cease once that time has elapsed on claim – whether or not you return to work. A long term (to Age 65) benefit period allows for long term illness or injury that keeps you from being employed.

Your initial claim is determined on your ability to perform your own occupation. Not all products are the same in the market and many have a change of occupational definition from year 2 (whilst on claim). This allows the insurance company to assess if you are eligible to return to work in any suited occupation. Some insurers will only retrain you into any suited occupation if you have the ability to earn more than 70% of your pre-disability income.