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Business revenue insurance

If a business owner or key employee dies or can’t work, business revenue insurance can help you meet operating expenses.

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Every business needs a plan in case one of its owners or key employees passes away or becomes disabled and unable to work. That's where business revenue insurance comes in. It can provide cash to meet your regular operating expenses and financial support to find a suitable replacement.

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What is business revenue insurance?

Business revenue insurance, as the name suggests, is designed to protect your business' revenue. It provides the funds you need to return the business to the financial position that it was in before a key person was forced to leave or passed away. You can spend those funds on hiring and training a replacement, paying ongoing overheads, rebuilding client relationships, protecting your profit or looking after your revenue in some other way, it is entirely up to you.

The purpose of business revenue insurance is to offer much-needed financial protection for your business. The simple fact is that the loss of a key person could create significant issues for your business that could in turn lead to a loss in revenue. You could lose clients or your business may lack the strategic direction and expertise that your previous employee offered.

What does business revenue insurance cover?

Business revenue insurance can cover the loss of any money you would have made while your business is down a key team member. It can cover you for:

  • Loss of revenue
  • Ongoing operating expenses
  • Finding and training a replacement
  • Recruitment fees

What does business revenue insurance exclude?

Exclusions differ between insurers but you'll generally find that business revenue insurance won't cover you for the following:

  • Any undocumented income
  • Non-essential employees or workers
  • Voluntary closures
  • Losses due to strikes

How much does business revenue insurance cost?

We can't give you an exact cost because every business is different. Business revenue insurance costs are based on how much it would cost to offset replacing a key person who is no longer able to fulfill their duties due to critical illness, death or disablement. As a result, insurers take these factors into consideration when calculating your premiums.

  • Finance. Are there any borrowings or financing that needs to be repaid?
  • Payout. Are there any loans or other payments that are owed to the key person or their estate by your business?
  • Client Fallout. Are there any client relationships that would suffer irrevocable damage should a key person no longer be handling their account?
  • Handover. How long would it take to find a suitable replacement and train them up in your company's processes and what would this process cost?
  • Fallout. What would the immediate costs of losing this key person be to the business? How would this disruption affect your company's profits?

What other types of insurance should you consider?

Here are a few other important types of business insurance you should consider taking out:

  • Commercial property. This looks after our property or its contents if they're damaged.
  • Professional indemnity. This covers legal costs if your business provides inaccurate advice or poor service to a customer who sues you.
  • Product liability. This covers legal costs if a product you sell harms someone and they sue you.
  • Public liability. This covers legal costs and compensation if you cause injuries to someone or damage their property.
  • Business interruption.This covers lost income if your business is unable to operate. For example, if a storm damages your store and you can't open to customers.

What does the application process look like for business revenue insurance?

Business revenue insurance applications are usually done through a broker. This is helpful because they can tailor a policy to your needs. You'll generally be asked:

  • What is your annual turnover?
  • Would your clients be affected by the loss of the owner or key employee?
  • Would you require time and money to train a suitable replacement?
  • How would the loss of the owner or key employee impact your revenue?
  • What other ways might the loss impact your business?

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