How to protect your business from upheaval if the owner suddenly dies

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How to protect your business from upheaval if the owner suddenly dies GlobeInvestor

Upon untimely death of an owner, businesses must identify their key-person insurance needs and educate themselves through a broker or adviser about the best products to fit their situation.The untimely death of a business owner or someone else critical to the enterprise can be devastating, causing it to fail or requiring time and money to get the company back on its feet.

“It’s all part of a bigger conversation,” he says, starting with an awareness that certain people are assets to the business that will have to be replaced – and pose a detriment to the company – if they are absent. “It’s an important element of ‘what if?’ planning.” The company pays the premiums and is the beneficiary of the policy, so it receives the insurance payoff.

Some companies come up with unique forms of contingency plans and funds so the firm can keep operating in the event of illness or death, Mr. Roissl says. However, he often sees companies that spend time and money working on agreements but then do not actually finance them or get around to arranging for the insurance required.

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