Before addressing key personnel, a business should address their overhead or essential costs of doing business.
Disability Overhead Insurance
You may have personal disability insurance that replaces some of your personal income if you are disabled, but what about the cash flow you and other key employees or partners generate for your business? How long would the practice be solvent and stay open without it? You should know who produces what dollars in your practice and be realistically insured if yourself or another key producer can't work for some period of time so that your practice remains solvent, and to avoid having to go into your savings (or worse, into debt) to keep it open. This distinct coverage, referred to as Disability Overhead Insurance does just that and should be adequate to cover all the fixed monthly expenses your production covers.
Key Person Disability Insurance
Closely related to the coverage above is coverage for the loss or incapacity of key employees who either are themselves big producers or perform vital functions that allow you to produce. This insurance benefit helps cover any temporary income loss and the costs of locating, recruiting, and training a suitable replacement.
Premium costs vary with the size of your organization and your individual underwriting and claim history, but getting all the coverage above costs less than just the retainer to get a lawyer to begin to defend you against any one of these exposures. Dollar for dollar it's some of the best defense available for your wealth and practice. Review this list with an experienced commercial insurance agent for help today so that you are covered for the rest of the year.
The content in this press release was taken from Ike Devji’s article Common Flaws of Asset Protection Planning, with permission.