Insurance vital to business success. (Business Management).

When you start a business there are many things to consider; however, people rarely think about how a prolonged illness, serious accident or death might affect their business. With a little forethought and appropriate insurance coverage an entrepreneur can greatly increase the chances of their business surviving, regardless of the circumstances in their personal life.

Being self-employed has many advantages, but it does not have any of the employment related benefits. Entrepreneurs do not get sick days, paid vacations and pensions. As an entrepreneur you are responsible for funding all of these items.

Entrepreneurs most often neglect to investigate wage-loss replacement, critical care and life insurance plans.

Fixed cost insurance programs

This type of insurance is only available for businesses and is relatively new. It covers the entrepreneur's fixed monthly expenses. Fixed costs include such items as utilities, vehicle lease payment and rent. If the business owner were unable to work in the business due to health problems a claim would be filed with the insurance company after the elimination period has expired. An elimination period is the amount of time that must expire before the insured is eligible to file a claim. The length of a claim is dependant on the plan; it can cover a short or longer term.

Disability insurance programs

Disability insurance may be purchased both for private individuals and business owners. Coverage and premiums are based on the entrepreneur's annual business income. If the entrepreneur were unable to work in the business due to health problems, a claim would be filed with the insurance company after the elimination period has expired.

Workplace Safety and Insurance Board self insurance program

In Ontario, an entrepreneur may elect to voluntarily register with the Workplace Safety and Insurance Board. By doing so, the entrepreneur is insuring his gross earnings from the business in the event of a business-related injury or illness. If your other insurance plans do not provide coverage for accidents you may want to investigate this option.

Critical care insurance programs

In the past people were afraid of not living long enough to enjoy their retirement, and quite often these fears were well founded. With better health habits and medical advancements people are living longer than ever before. However, many people do not consider the devastating effects a prolonged illness or serious accident will have on their financial well being. Although Canadians are extremely lucky to have a public health system in place, it is not all-inclusive.

Life insurance

No one wants to think about his or her own mortality, but unfortunately we must. A good life insurance policy can protect you and your loved ones. The insurance benefits received by your beneficiary or beneficiaries may be used to continue the operation of your business if that was your wish.

You can contact the Insurance Bureau of Canada about your business and personal insurance concerns, and the Workplace Safety and Insurance Board about Self Insurance Programs.

Suzanne Legault is a small-business consultant at the Regional Business Centre in the City of Greater Sudbury.