The decision to start your own business can be one of the most rewarding of your career. According to the U.S. Chamber of Commerce, small business owners are America's unsung heroes, creating as many as 80 percent of the net new jobs in the country today.1
But what about the risks you take to make your dreams come true? In business, as in life, "stuff" happens. Your hard work and dreams can be lost in a few minutes if you don't have a plan for dealing with unforeseen events — including the disabling impact of illness or injury on your employees or on your business.
What should a sound risk management plan entail to address the impact of disability? Generally speaking, you'll need coverage to protect your human capital, and coverage to protect your ability to do business. The specific types of insurance you need will depend upon the type of business you have and how you conduct that business. But selecting the right coverage for your business shouldn't be an either/or scenario. What you want is to find the right combination of policies that provides protection without duplicating coverage.
Protecting Your Human Capital
As your company grows and you add employees, it becomes increasingly important to protect your human capital — the key employees who are vital to the success of your business. And disability income insurance to protect your employees can help you create a competitive benefits package — one that also can help you enhance your business by recruiting and retaining quality employees. While most states require companies to carry workers' compensation to cover the cost of work-related injuries, it's important to keep in mind that only about 4% of long term disabilities are job-related.2 Valuable disability income protection can be provided for employees through group disability income insurance, individual disability income insurance, or a combination of the two.
Protecting Your Ability to Do Business
Protecting your human capital makes good business sense, but what happens when a loss directly impacts your bottom line? How will you keep your business running if you or another owner becomes unable to work? Disability overhead insurance can provide needed cash to meet business expenses such as rent, payroll, benefits, utilities, taxes, maintenance costs and others. Disability key person insurance can help your company weather the disability of a key employee. And disability buyout insurance can help purchase the business interest of a totally disabled owner.
Protection That Grows Along with Your Company
In short, the right disability insurance coverage can help ensure your success by protecting your employees and your business against the impact of disability. But managing risk is about more than having the right coverage — it's about making sure your risk management program evolves to protect your business through all its phases of growth. That's where an experienced financial representative can help. A financial representative who focuses on meeting the needs of small business owners can help assess your current financial security needs to determine the coverage you need and in what amount; create a strategy that can grow along with your business; and provide support to ensure your risk management strategy reflects the ongoing needs of your business.