subject: Businesses Benefit From Sufficient Insurance [print this page] certain types of insurance in Toronto are essential to protect the life and assets of a business. Normal business operations generate income that covers expenses and payroll every week. Interruptions, caused by significant events, can reduce the stream of income while increasing other expenses. Flexible insurance products can be utilized to create some financial advantages for the business, including:
Source of cash for business needs
Reduce the corporate tax bill
Cover the loss of a principle or key employee
Fund a purchase or sales agreement
Secure financing
Fund capital gains liabilities
Various sources of financing require sufficient proof that the loan can be repaid by the business. Some assets are listed on the loan as collateral, but the business owner will hesitate to list revenue-generating equipment on a loan application. Some lenders will accept the Cash Value of a universal life insurance policy as collateral for a line of credit. The insurance policy becomes helpful when the business owner wishes to pursue various opportunities, such as:
Business expansion or additional operational expenses
New business opportunities
Emergency cash
Supplemental retirement income for certain employees
Fewer than 20 percent of all businesses will survive the loss of the owner or a business partner. An insurance broker in Toronto will encourage every business to purchase life and disability insurance in Ontario. The business must be designated as the beneficiary on the life insurance policies. Insurance proceeds would be used to fund the transition plan that must be written as part of the business plan. Employees and families depend on the decision makers to cover the financial needs of the business in the event of loss. The livelihood of each person depends on sound insurance coverage for the business.
Certain key employees must be covered by disability and life insurance to provide funds that will allow the business to replace the skills that have been lost. Businesses rely on the expertise of officers and employees to provide revenue-generating products and services. Insurance policies provide the funds to sustain business activities in the transition period.
Insurance coverage for businesses can appear to be an unnecessary expense until a significant loss occurs. Many layers of insurance will work together to cover the people, assets and liability of the business. Annual insurance reviews prevent gaps in the coverage.
by: Adriatic Financial Services Inc.
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