The right insurance and financial planning strategy can help keep your business on course so you can achieve your goals, whether your business is in startup mode, entering a strong growth phase, becoming more established or nearing ownership succession.
Knowing the right solutions for each phase of your business can help you better understand how to protect and maintain what you've worked so hard to achieve. There are key insurance needs at various business stages and it's important to determine how well covered you are.
Startup phase: Business insurance offers a solid foundation for your growing business
As your company grows, so will your need to protect it. Losses and unexpected business interruptions happen when you least expect them: a client is injured on your property, your business is vandalized or a fire in the neighbouring coffee shop damages your office. If the worst happens, you want to know your company is protected with the following.
- Commercial property coverage protects against loss, damage or theft of your property, contents and other items. Be sure your commercial policy contains coverage for loss of income from business interruption to help you pay rent, utilities and other fixed business expenses.
- Liability insurance protects against claims of bodily injury and property damage.
- Errors and Omissions (E&O) coverage protects professional advice and service.
Growth phase: Protect your key team members
Instead of using personal guarantees for businesses in a growth period, which can expose personal assets to litigation or bankruptcy, business owners can use these alternatives:
- Individual wealth products can provide creditor protection for business owners and their families.
- Segregated fund assets may be protected from creditors in the event of bankruptcy, so they can be an effective way to safeguard at least part of your financial assets.
Individual wealth and estate planning also protects growing small businesses from the sudden loss of key team members if they become critically ill, disabled or die. Replacing lost revenues and providing the necessary funds to pay expenses is essential for the business to remain successful.
- If a key team member dies, term life insurance provides funds to the business while it adjusts to and deals with the resulting transition.
- Disability insurance can help offset lost revenues if a key employee becomes disabled.
- If a key business owner dies and a buy-sell agreement is in place, its provisions will provide funds for the heirs, employees, creditors and surviving partners to cover expenses.
Established phase: Employee benefits and retirement savings contribute to business performance
Established businesses need to attract top performers, avoid costly turnover and enhance employee satisfaction. Showing employees your business is committed to their health and well-being contributes to your company's success.
- Group benefits plans can attract and retain qualified employees who provide your business with a competitive edge.
- Group retirement plans can help to reward employees and help them save for the future. Employer-sponsored retirement programs help employees save money while reducing and deferring taxes.