If you, your business partner or another key person in your business died or was unable to work for an extended period of time as a result of illness of injury, it could have a significant financial impact. Small Business risk insurance can make sure that your business remains afloat no matter what happens. It can include cover to repay external debt or cover loss of profit, ongoing business overheads and even loss of personal income.  

Most businesses in New Zealand have three areas of vulnerability that need to be covered: 

Debt Repayment – – Business loans are often secured by the personal guarantees of the principals and their families. If you were to die or suffer a serious illness, the cash flow required to service any business loan may be affected. If creditors are not prepared to roll the loan over and instead they call it in, your personal assets and those of your family may have to be sold to repay it. Business insurance nz can make money available to the small business at the time it needs it the most. 

Business Continuity – If you or your key employees were unable to work for an extended period of time due to illness or injury, the financial impact could be huge. Again, a business continuity insurance policy can make money available at a critical time to ensure the small business can keep functioning during the absence of key employees 

Ownership Continuity – If a director or shareholder dies, the estate usually has the right to demand immediate repayment. In situations where there are two or more partners or co-shareholders in a business, significant problems may arise if one dies or suffers a major illness. 

You and the surviving partner or co-shareholders could face the following issues: 

• having the deceased or seriously ill partner's family come into the business or nominating someone to look after their interests 
• selling assets or the business itself to pay out the interest of the deceased or seriously ill partner or co-shareholder 
• the departing shareholder or their family could end up retaining a share of the business that they do not want and cannot sell 

Thankfully, protecting your small business from the loss of a director or shareholder is actually quite simple. It’s about thinking ahead, seeking advice and making a plan by putting an appropriate small business insurance package in place. And that’s where your SHARE adviser can help.