When it comes to small business insurance coverage, have you ever considered what would happen if for some reason you could not work for an extended period of time? How long could your business continue without you there to operate things as you do?
Fortunately, even small business owners can purchase what is known as disability insurance. This is insurance that can replace your income in the event of an accident or illness. Probably the biggest decision related to small business insurance and disability insurance in general is determining how much insurance you need and can afford.
In order to determine this you will need to review your assets as well as your liabilities. This will help you determine what your expenses are, or what money will be going out, and what money will be coming in. In most cases a small business is able to maintain itself for a very short period of time. After that it begins to falter. There may be some financial resources that can be tapped into to fill in for another short period of time, but soon that will run out too. That is why most people need disability insurance.
Keep in mind that insurance companies won’t cover your income 100%. This is because they want you to have an incentive to get back to work. Most companies are happy to offer about 60% of your gross income, but the amount can be as low as 40% or as high as 80%.
In order to get the best small business disability insurance for your needs and money there are some things you should keep in mind. The first thing is no matter what insurance provider you are working with, be sure to fully understand what their definition of disability is. This can make the difference in being covered after an accident, to what extent, and not being covered at all. For instance, it is possible that a policy would consider that although you may not be able to perform the work you have been doing, you could perform another job and therefore you are not disabled.
It’s always advisable to shop around and compare rates as well as the financial ratings of the insurance providers. Shopping online is usually the easiest and fastest way to do comparison shopping. Many times you can save money by purchasing insurance through a professional or industry association. These groups often offer packages that include exactly what is needed for persons in such industry or profession. Additionally, you can add a cost of living adjustment which would help your income stay current with the rising cost of living each year.
Another option is to consider whether you can add disability as disability rider insurance on to a life or mortgage insurance policy. This may reduce the costs substantially. Always check to see what disabilities are covered under the plan you purchase. It is important that the ones covered include the ones that are likely to be problematic for persons in your area of occupation.
You will also want to ensure that the plan includes guaranteed insurability. This means you will be able to add more insurance without additional medical qualifications. A non-cancelable policy will provide fixed premiums and benefits. Your costs will be locked in but the price may be higher than other policies.
Besides basic disability insurance there is also a business overhead expense plan. This is intended to cover much more than just income, it can cover things like rent, utilities, and other expenses related to the business.
The reality is that there are many factors to consider when purchasing small business insurance. You have to look much deeper than price alone. That’s why most people choose to rely on the advice of a trusted insurance agent or broker.
About The Author
Debbie Allen of The Things Women Want has written several books, ebooks and thousands of articles and reports. Debbie has a background in Psychiatric Nursing, Nurse Education and Organizational Development which has resulted in several areas of interest and specialty.