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Is Your Restaurant Protected If You Are Disabled or Die?

Posted by David Ross on Sat, Feb 18, 2023

Insurance for restaurant owners in Philadelphia, Allentown, Reading, Lancaster, Harrisburg, Pittsburgh, Erie, York, and throughout PennsylvaniaRestaurant 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.

Tags: Restaurant Insurance, Buy-Sell Agreement Insurance, Key Person Insurance, Life Insurance, Restaurant Insurance Costs

Business Insurance to Attract Employees and Protect Your Business

Posted by David Ross on Thu, Nov 14, 2013

Business Insurance that Attracts & Retains Employees

Business insurance to attract and retain employees and to protect your business, from key person insurance to insurance for better employee benefits. Available from American Insuring Group, serving Reading, PA, Allentown, Philadelphia, Harrisburg, York, Lancaster, Erie, Pittsburgh, PA and beyond for over 25 years.Great employees can be the fuel to move your business ahead of the competition. Dedicated employees add more and more value over time as they gain increased knowledge and experience. While everyone likes a company that offers great benefits, the best employees and job candidates are likely to view the quality of the benefits you offer as a compelling reason to join, remain at, or leave your firm.

With today's cost of purchasing individual insurance, employees are likely to view well-designed employer insurance packages as a deciding factor in selecting one company over another. Furthermore, strong benefits packages help retain your best employees, reducing the high cost of employee turnover.

Designing an Attractive Employee Benefits Package

That's why smart business owners create attractive employee benefits packages that not only include health insurance, but often life insurance, extended disability insurance, dental insurance, and generous retirement plans, among other options. Executive compensation packages may also include deferred compensation plans and higher levels of insurance coverage to retain your best talent. It pays to be well informed on the range of insurance options available to your business.  Your independent insurance agent can be a key resource to help you craft an employee benefits package that attracts better employees at a price you can afford.

 

Commercial Insurance to Protect Your Business in Ways You May Not Have Considered

General liability insurance, property insurance, vehicle insurance, and workers' compensation insurance form the foundation of your business insurance protection. However, there are other types or subcategories of commercial insurance to consider. Among these are key person insurance, individual insurance, and insurance-backed buy-sell agreements.

Key Person Insurance: Thinking Beyond Job Titles Alone

Key person insurance, also known as key man insurance, is designed to reimburse you for the loss of sales or earnings due to losing an executive, business partner, or other key employee due to disability or death. When considering key person insurance, think beyond titles and identify those employees in your organization who, if unavailable, would dramatically impact your sales or the continuity of your business operations.

These may include high-performing sales reps and customer service personnel, as well as employees with deep technical knowledge of your industry or complex internal processes. Such people may be very difficult to replace with someone of similar knowledge or talent, resulting in reduced productivity or lost sales revenues for your firm for years to come. Your independent insurance agent can help you put together a smart key person insurance package to protect your business financially from the impact of losing a key employee. 

Backing Buy-Sell Agreements with Business Insurance Protection

In the excitement of starting a new business with your business partner, business owners often overlook the need to work out all the details of a buy-sell agreement that comes into effect as a result of the loss of the other business partner due to retirement, death, or disability. While an attorney may be invaluable in putting together such agreements, don't neglect the need to obtain the proper life insurance on each partner to carry the remaining partner through the transition period and to keep the business financially healthy. The insurance coverage should be sufficient to buy out the departing partner's share of the business due to any of the circumstances mentioned above.

Life Insurance for Business Owners: Obtaining the Right Amount of Coverage

Business owners should carefully determine the amount of personal life insurance protection needed. Unlike employees, owners often have significant personal assets tied up in the business, such as a second mortgage that may have been used to finance the business. If the surviving family members' income drops significantly due to the death of the business owner, the results can be disastrous not only for the family, but for employees as well, even if significant personal loans and assets have not been invested in the business.

Low levels of life insurance may threaten not only the entire business, but also the careers of all employees by potentially forcing the surviving family members to liquidate or sell the business to pay the personal debts of the deceased business owner, or simply to provide the income needed to keep up with day-to-day financial obligations.

We Can Help with All Your Business Insurance Needs

We can help you make sense of your many business insurance options, from key person insurance, to life insurance, health insurance, disability insurance, dental insurance, and other forms of personal and commercial insurance to protect your business, and to attract and retain employees. We serve businesses in Reading, PA, Philadelphia, Allentown, Harrisburg, Lancaster, Lebanon, State College, Pittsburgh, Erie and points in between and beyond. 

Contact us

(800) 947-1270 or (610) 775-3848 

Take the challenge - get a quote. We offer the best insurance protection at the best price.

Take the challenge. Get a business insurance quote.

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