Business protection is the process of implementing strategies to preserve, protect, and promote the value of a business.
Business owners need to protect the integrity of their business in order to:
- Maintain business operations in the event of the loss of a key employee
- Preserve the value of their business until they choose to exit
- Better facilitate a transfer to family members, key employees, other owners, or third parties upon their exit
- Key Person – Protects a business against the loss of a key employee because of death or total disability. Implementing a life insurance and/or disability income policy on the key person helps provide the funds necessary to recruit and train a replacement.
- ESOP (Employee Stock Ownership Plan) Repurchase – Uses life insurance to provide the liquidity necessary to fund the employer's repurchase obligation of stock distributed to employees through an ESOP.
- Business Overhead Expense - Reimburses business owners for business expenses incurred should they become too sick or hurt to work - allowing them to keep the business running. This insurance helps them until they can return to work or arrange for the transfer of the business.