Business Insurance and Business Continuation Plan should be in placed to keep organization in normal operation in case of company’s leaders, executives, partners prematurely die or become disabled. Typical plans include, but not limited as below.
Keyman Insurance: To protect the company’s economic loss in the event of losing a key employee.
Corporate Owned Life Insurance (COLI): The company owns and pays life insurances of employees. If the employee premature, the company gets the tax free death benefit. COLI is usually used to help the company fund retirement plans, employee benefits and costs of replacing employees.
Business Exit Strategies: The business owner can plan early to choose how and when they would like to exit the business. Exit strategies can help to limit the loss if the business is not making enough profits when exiting.
Buy and Sell agreement: Both the business owner and potential buyer sign a legal contract that the buyer will purchase the business with a pre-determined value and exercise the contract when defined events occur. Normally, triggering events can be the business owner retires, goes bankrupt, becomes disabled, gets divorced or dies.