Insurance vital to business success.

• Author: Legault, Suzanne
• Position: 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...