| Protect Your Future With Insurance

Posted in Small Business at 9:00 AM by Loftis Consulting

So many business owners have not protected their business or their family by not having the proper types and amounts of insurance coverage.  Insurance coverage is critical in case of injury or death of the business owner.  At a minimum, you should have the following:

  • Life Insurance to protect your family in case something happens to you. Make sure get enough coverage to take care of the things that are important to you such as a 4-year college education for your children or to payoff the mortgage. Remember, it must be enough to cover the items that your income would have covered if you were still around.
  • Disability Insurance to protect your income earning potential in case of a catastrophic incident or just for having a short-term illness.  For example, with the sophistication of today’s modern medicine, many people cannot only survive but go on to living a fulfilling life after a major accident. However, many times there is major expenses related to hospital bills, rehabilitation bills, home renovations for at home care and such. You will need to not only cover the expenses of care but also income why you are disabled or out on short-term sick leave. Most salons and spas do not have sick pay.
  • Worker’s Compensation to protect your employees. Most states require that you pay into a worker’s compensation fund for your employees as part of your payroll taxes. However, this does not help workers who are booth renters and not considered employees of the business.  If this is the case for your business, you need insurance to protect your business in case an independent contractor hurts themselves on your premises such as a slip and fall. By not having insurance you put your entire business at risk from a single lawsuit.
  • Business Continuity Coverage which protects your business income if you cannot work in your business due to no fault of your own. For example, the water in your building is shut down for a week. You cannot operate a salon without running water so you lose all income for a whole week. That can be disastrous for a business. Well business continuity coverage will not only reimburse you for that lost income but make sure you have that cash flow you would normally have to cover expenses such as rent and payroll for the time the business was shut down.

Most insurance policies can be tailored to your specific needs so don’t settle for a one policy fits all type of scenario. Educate yourself on costs and your business needs BEFORE meeting with an insurance specialist. Also make sure to shop around for the best price from a reputable insurance company. You want to make sure you select an insurance company that will have the means to payout your claim either today or in the distant future.

Insurance is only one aspect of managing the financial health of your business.  Visit the Loftis Consulting website to learn how part time CFO and Controller services can help your business.


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