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WHAT ARE THE DIFFERENT TYPES OF BUSINESS PROTECTION?
INTRODUCTION Every business needs financial protection in case death
or serious illness or injury of the owner, partners, shareholders or important staff.
Without any business protection, death or inability to work long by one of the essential people who make the company or firm can make your business unstable.
These circumstances may lead to financial penalties, loss of sales, delay in new launches, loss of customers and decreased faith amongst them.
This is why your business should look into ways to cope up, in case of any damage to financial support to your business, when something worse happens to people who are pillars of your business.
Business protection helps your business stay afloat and survive when the worst happens.
Whatever is your business, you will need some type of business protection to keep your business financially stable.
Business protection is different from insurance. This is because an insurance will cover the life of an employee and help their family save the earnings in the event of his/her death or serious illness.
On the other hand, a business protection cover will help business owners to keep the company financially stable, repay loans when an essential person concerning the business is critically ill or dead.
While insurance protects the personal needs, business protections focuses solely on business needs.
PARTNERSHIP BUSINESS PROTECTION
Depending on how your company is built, you can choose different business protection covers.
Your business protection is of two types:Partners or shareholders.
Partnership business protection:Here the business decides the key to their business is their partner.
Hence, the partners take a business protection cover on his/ her life and write it under trust.
This is done for the benefit of other partners of the business. When this done, other partners join into a mutual agreement.
COMPANY BUSINESS PROTECTION If the person for whom the policy is taken is not a
shareholding director or employee, then the company just has to make sure the benefits of the policy, in case of death or serious illness of the insured goes to the company.
Company business protection: Under this cover, the company takes business protection to each individual shareholder of the company.
In case of death of a shareholder, the benefits of the cover are used by the company to purchase the shares from the next of kin of the deceased.
In this case, a cross-option agreement is necessary between the company and the shareholder.
BUSINESS LOAN PROTECTION.
There is another type of business protection cover called business loan protection.
This type of cover is opted by companies that are under debt or have taken loan.
It covers an individual and in the event of his/her death or serious illness, company uses the money from the cover to repay the business loan.
This kind of business cover is taken for person who acts as a guarantor for the business loan.
Each type of business protection has its own advantages and should be taken after careful considerations as well as consultation with a financial professional.
