Two types of insurance business owners MUST have


By The Inc.

If you’re not prepared, disability could seriously injure your business. 

You might not realize that disability is often as costly to startups as the death of a key employee or partner, and more importantly, it’s more likely to happen. There are coverage plans that can help you prepare for the disaster risks to your business, as one financial advisor outlines in a recent Wall Street Journal article.

While these programs can be costly–the AARP estimates a typical premium of around $3,400 annually for a policy offering $3,600 in benefits per month–they could also mean the difference between your company’s success and failure. In the grand scheme of things, that’s a relatively low price to pay.

Here’s what you should consider adopting:

1. Key-Person Disability Insurance

Key-person insurance, as the name suggests, will provide your business with the funds necessary to replace an employee who is no longer able to work.

2. Personal Disability Insurance

This coverage plan will compensate your partner (or yourself) in the event that you sustain a major injury or illness.

If you have a co-founder, it may also be worth investing in buyout disability insurance, which will pay back the disabled owner for their shares. And for fledgling startups, it’s worth shelling out for disability insurance for overhead, which will go towards your general operating expenses if a key member of your team becomes disabled.

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