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Our business has 3 partners and after 2 years together we have started discussing how we can protect the business and our families. What type of insurance should we be looking at?
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Hi Chris, it's worthwhile getting very good advice from a professional insurance specialist.
In my business we lost a key person very early on as a result of a sudden death and didn't have this piece solved. We had conflicting advice on whether the corporate PI / Mgt Liability policies may have provided some assistance.
When we went through the process of talking with specialists we found the advice varied substantially - from our experience you're best to find an insurance specialist, a legal specialist who understands estate planning etc and an Accountant you trust. As all three play a critical and interdependent role in designing the right protection for both your business and each partner personally.
Personally - we interviewed a number of these parties and selected an insurance specialist who charged us by the hour vs being paid a commission. For us it was critical to have unbiased advice vs advice paid for by a particular insurance company via commission.
Anyway that's our story - hope it helps.
Damien
Hi Chris,
There are two type of Insurance you need to consider which are best set up separate to your personal cover (but still related).
Key Man Cover & Buy/Sell Cover.
We (Safeguard Life) are Insurance specialists in this are, and can give you the right advice with the right product in the market which as a broker we can source for you.
Please refer to our website (which is about to be revamped) which has details. www.safeguardlife.com.au
Please contact me directly should you like to discuss on 0418778899
Regards,
Mark Butler
Associate Principle
Hi Chris,
Thank you for your questions and it is great to see that you are protecting the business and individuals involved.
There are some great answers by the other professionals in this group and as mentioned it is best to seek advice from an Accountant, Solicitor and Insurance Specialist or Financial Adviser to assist with the structure, levels of cover and estate planning requirements of the business and partners.
It is best to look into the business and identify any areas of concern and gaps in your current situation before putting an Action plan in place. Insurances that you should be looking at include:
Buy/sell Agreements
Key man cover
Business expense insurance
General insurance options
Each cover has specific requirements and is not for every business, although it best to understand exactly what is best for you and the other partner's of the business.
If you would like to discuss this further and would like an complimentary initial consultation please contact me. I am able to come out and see you as I have client's with similar requirements in the Marrickville Area.
Thanks,
Ronald Pratap
Principal Financial Adviser
RP Wealth Management
T: (02) 9188 1547
M: 0434 502 079
E: ronald.pratap@rpwealthmanagement.com.au
W: www.rpwealthmanagement.com.au
F: https://www.facebook.com/RPWealthManagement
Hi Chris, this is all really good advise. All I would add is do your homework & work out exactly what you all want in a worse case scenario, as this will save a lot of time, ie. if something happens to one of the partners, will their family still want to own their 3rd share of the business, will the other partners want them to own the 3rd share, etc. Once you work out what you want, you can then use a good financial planner to help you work out how to get it & more importantly, how to make sure it happens without any heartache. Be prepared to spend some money on whatever legal agreements you need & insurances as well. Some people don't like the idea of paying what sounds like big insurance premiums, but just think of it this way, even if you spend $50,000 a year on insurances for the next 10 years (which will creep up), that's still cheaper than having to go to a bank & borrow say $2m to pay out a partner's family. And pay it back. And/or have to sell the business in total if you can't raise the cash......... Good luck.