Why is it that many businesses don’t consider their people to be the biggest asset in their business? They insure the items of plant, the stock, buildings, motor vehicles and the like. But without people… nothing would get done. I’ve seen some major issues over the years, and hope the following example will give some food for thought.

Disability: Long-terms disability of a principle, caused through sickness or accident, can become a burden on the cash flow of the business. The disabled principle will need reliable, ongoing income to continue to support a family, and having to pay a continuing income from a business faced with paying an extra salary to a replacement employee can be a burden on business cash flow. In many businesses, where a principle generates income for the business as a direct result of personal input, i.e. commissions, fees or sales revenue, the resulting loss of all or part of that income to the business can also be very hard cash flow, and resulting profitability.

Permanent, Non-cancellable Disability Income insurance can provide consistent, guaranteed income for as long as the disability lasts, up to age 65, or longer. This allows the business to use the salary normally paid to the disabled principle to help pay the replacement employee, reducing the effect on the business cash flow. Business Locum and/or Business Overheads insurance cover can reimburse the business for the short-term cost of replacing the disabled principle, or provide the business the funds to cover normal fixed outgoings.

The cost to the business to replace a principle with an employee is often high, as it may require more than one employee to cover the duties handled by a principle. Death and Total Permanent Disability can will provide capital to support restructuring or sale if a key principle dies or is disabled.