Most New Zealand businesses understand the need to manage the risks they face every day. Business premises, vehicles, equipment and stock are usually insured against fire, flood and theft, but many businesses forget about their most valuable asset—the people who keep the business going every day.
Protecting businesses against the loss of their owners or employees is an important function of any business insurance policy. Understanding and managing the risks a business could face if it were to lose one of their owners or employees for a longer period of time can help protect against the consequences.
In general, businesses are facing three basic, insurable risks: Loss of a business owner, loss of a key person and debt repayments.
Business Ownership: Losing a shareholder or business partner
If a shareholding director or business partner is unable to work for a longer period of time, it can have a serious impact on a business. Would your business survive if one of the owners were to fall seriously ill, become totally or permanently disabled or die unexpectedly?
Who would take their place, look after the daily business and decide which direction your business should take?
Key People: Losing your most valuable assets
We are all aware of the fact that employees are our most valuable business asset. In any business, there are key people that play an essential and valuable part. Losing these people for a longer period of time due to illness or an accident can really put your business at risk.
Would you be prepared if something would happen to a key person in your business? How would losing them impact on your business?
Options are available to protect your business against the loss of a key person and the revenue they generate.
Business Debt: Meeting loan repayments
Often, businesses need to rely on loans to be able to afford certain resources or assets. If you, your business partner or a key person would be unable to work for a longer period of time, it could become very difficult to keep up with financial commitments.
Have you considered your ability to pay back debt if something would happen to you, your business partner or a key employee? The ability to borrow and repay loans is often dependent on the income generated by a key person. If that person becomes unable to work, business insurance could help repay any outstanding debt or help you meet your ongoing repayments.
It’s not a case of ‘Can you afford it?’ but ‘Can you afford to be without it?’
The risks outlined above are very real, and can have a huge impact on your business. There are a number of insurance policies available that can protect you against those risks so you can worry about your employees getting better, with the confidence that their absence from work will not put your business at risk of closing down.
ASB’s Business Lifestyle Security Plan is a total insurance solution designed for businesses. We can work with you to develop a personalised recommendation specifically for you and your business.
If you would like to find out more, just call 0800 272 222 and arrange a meeting with an ASB Business Insurance Manager.
The risks are very real
- Two out of five people will be unable to work for six months or more because of sickness or an accident at some time between the ages of 30 and 65.(1)
- 13.96% of Adult Males (15 - 65) currently have a disability that has kept them off work for six months or more.(2)
- 12.69% of Adult Females (15 - 65) currently have a disability that has kept them off work for six months or more.(2)
- 67% of businesses have to close due to the injury of a key person (3)
Sources: (1) ACC BERL Report, June 2010. (2) Statistics New Zealand, 2006 disability report. (3) ACC research, June 2006.
The availability of insurance cover is subject to your application being approved. All applications are subject to individual consideration. Special conditions, exclusions and premium loadings may apply. ASB Business Lifestyle Security Plan insurance is underwritten by Sovereign Assurance Company Limited (‘Sovereign’). For full details of the products and benefits offered by the ASB Business Lifestyle Security Plan, please refer to the policy document(s) which are available from ASB Bank Limited or Sovereign.