Restaurant Insurance is designed to help protect you as an owner, your business, and your employees in the event of an unforeseen circumstance, such as an employee injury, lawsuit, kitchen fire, etc. But have you thought about how you would protect your business, employees, and family if something were to happen to you and you were no longer able to run the business?
Most small businesses – including restaurants - rely on their owner (or another key person) to keep the business running. If that person is disabled or dies, there could be severe consequences to the business, employees, and the owner's family. Here is how the right insurance can help prevent that from happening.
Personal Life Insurance
Personal life Insurance for business owners is particularly important since you may not have employee benefits such as group life insurance, a retirement account, etc. Personal life insurance for business owners helps your family survive financially if something happens to you. It covers costs such as income replacement, credit card debt, college tuition for your children, mortgage, etc.
When determining how much coverage you need, don't forget to consider any loans you took out to start or grow your business, especially if you used personal property – such as your home – as collateral. Those loan payments don't go away if you die; they become your family's responsibility.
The types of personal life insurance available are term life insurance, universal life insurance, or whole life insurance.
Term Life Insurance is the most popular type of policy. Rates are usually guaranteed for a certain period of years (i.e., for a term). People typically purchase term insurance as a way of obtaining cheap life insurance coverage for their families in case they pass away unexpectedly.
Whole Life Insurance provides coverage for your entire life. This form of life insurance generally has a guaranteed premium for life that does not increase as you age. Whole life insurance is more expensive than term life insurance, but unlike term life insurance, it builds cash value through dividends and interest.
Universal Life Insurance is a hybrid of term life insurance and whole life insurance. Typically, premiums stay level, and dividends or interest are earned on the cash value in the policy. This type of life insurance policy is usually suited for someone who wants a level premium for life but is willing to give up certain guarantees to achieve a lower insurance cost.
Buy-Sell Agreement and Life Insurance for Co-Owners
A buy-sell agreement (aka buyout agreement) is defined as "a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business or chooses to leave the business." It's often thought of as a pre-nuptial agreement between business partners or shareholders. Most business-succession specialists and financial planners recommend adding life insurance (earmarked as money to pay for a buyout) to simplify the process.
Key Person Insurance
Entrepreneur defines Key Person Insurance as "Life insurance on a key employee, partner or proprietor on whom the continued successful operation of a business depends. The business is the beneficiary under the policy." Key people are individuals who are crucial to your business – the people whose "absence would sink the company."
This type of life insurance can help cover expenses such as business loans, the cost of replacing you (or the key person), severance for employees if the business is forced to close, and buying back the key person's shares in the company.
How to Find Affordable Insurance
The right insurance will protect all of your stakeholders - your business, employees, customers, partners, etc. – and your family if the unthinkable happens. Still, you don't want to pay more than necessary for that protection. Fortunately, American Insuring Group provides quality restaurant insurance at affordable prices. Our independent agents shop the market to find you the best insurance to meet your needs at a great price.
So give us a call today at (800) 947-1270 or (610) 775-3848, or connect with us online.
