We have all heard about protecting the family with life and mortgage insurance, but consider this;
Imagine that you are the owner of a successful business and that you have two equal business partners.You jointly decide to form a Company and so you tip the assets of the Partnership (stock, fixtures, equipment, vehicles, maybe a property etc) that have been built up over the years into the new Company (let's say they are worth $450,000).There are Shareholder's Loans raised in the Company's books for the benefit of each Shareholder for $150,000.
In addition, the Company has a Business Loan of $200,000 used to fund growth (and an overdraft facility ($50,000).You manage the entire operation, with one of your partners a super salesman with lots of contacts and associations and the other, the expert in the Company's field of endeavour.
You arrive at work this morning to the terrible news that both your partners were killed in a car accident.
Apart from the obvious shock and emotional anguish you will experience, what other problems will very quickly loom large in your thoughts?
They are numerous:
Your partners' widows could easily demand repayment of the Shareholder Loans (after all they are at call)
Your two partners were key people in the Business with specific expertise.How long will it take to replace them?
What effect will that have on the revenue of the business?
How nervous will your Bankers be?
Will they call in your borrowings?
Do you have ready cash for any of this?
And what about your Shareholder's wives?
Do you want them to inherit their husband's shares?
Do you want them as fellow Directors?
Do they actually know anything about your Business?
Will they want to sell their Shares?
How will you negotiate a fair price?
Can you afford to buy?
Can you afford to borrow?
Will they have to sell to an unknown, unwanted third party?
Will they have to stay and you take 100% of the responsibility for 33% of the profit?
What about your staff?
Will they be thinking about moving to a competitor?
Is the same competitor not only looking to pick up your staff, but also your clients?
Where will you get the money?
Where WILL you get the money?
There is an ideal solution, which ensures that funds are available at an agreed sum at the time they are most needed and at a price that is a fraction of the cost of borrowing in an emergency.
Some pre planning with a Business Insurance Professional will ensure that your business has a "Business Will" in place to provide protection and peace of mind where there would otherwise be chaos and disaster.