There are two major risks all closely held businesses should make sure they are protected against: business interruption and a disabling event to a key owner. All business owners should check their protection against business interruption caused by a catastrophe, such as fire, flood, or other event that can make their business premises temporarily unusable. Business interruption insurance can offer coverage for lost revenue and earnings until the business can reopen.
A second type of coverage that is distinct from business interruption and is often overlooked is business overhead coverage in the case of disability. Business expenses do not end for those who suffer a disability. A business that relies on a small number of people (such as a law firm, CPA firm, architectural firm, or medical practice) to produce revenue is economically vulnerable if one of those individuals becomes disabled. A Business Overhead Expense Disability Policy will cover the ongoing operating expenses of the business. It provides resources for a period of time to allow the owner to recover from the disabling event. Alternatively, it provides resources to keep the business going while other arrangements are made either to continue operations or to prepare it for sale, thus preserving its value.
Leslie Thompson Partner Spectrum Management Group Indianapolis