Category: Planning & Management

A small business owner can buy two types of life insurance policies, associated with the business.

1. A small business owner can buy a life insurance policy for the business. Typically, the policy is in the name of an owner or partner. The business pays the premiums, and the business is the beneficiary. Premiums aren’t tax-deductible.
2. A small business owner can purchase group life insurance for employees. The premiums are tax-deductible as a business expense.

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What is Business Owner Life Insurance?

Small business owners should have individual life insurance, separate from policies associated with the business. Individual life insurance will help the family handle personal expenses and settle a person’s estate. Both business life insurance and individual life insurance can be a “term life insurance policy” or “whole life insurance policy.

Term life insurance coverage is specific to a chosen number of years. For example, a term life insurance policy might provide coverage for 15 years. A whole life policy is permanent life insurance. An insurance company pays dividends into the policy, and you can take out policy loans against the accumulated cash value of the policy.

Group life insurance for business covers employees and is part of an employee benefits package. A business owner’s life insurance is owned by the business, and the business is the beneficiary. It is key person insurance that pays out when a key person – such as the owner or a partner – dies. You can add riders to be covered if a key person or partner becomes seriously ill or disabled.

Why You Should Take Out a Business Life Insurance Policy, and Employee Life Insurance Policies

Owners put their heart and soul into establishing and running their small businesses. A business life insurance protects that investment:

• The business life policy payout is tax-free income and can cover business loans, such as mortgage payments, and other debts
• By protecting the company, the policy will protect employees’ jobs
• If there are business partners, and there is a death of a business partner, the policy payout can help redistribute the deceased business owner’s share of the company
• It can help fund the search for replacing a key employee who has passed away
• It can be reassuring for employees to know that the company’s financial future is protected
• A life insurance policy for your small business will protect your company
• Providing life insurance as part of an employee benefits policy can help you compete for employees
• Premiums you pay for employee life insurance policies are tax-deductible

What is Covered by Life Insurance for Small Business Owners?

A business life insurance policy covers the business, but it doesn’t protect your personal finances. Here are some of the ways the business life insurance policy payout can be used:

Key Employee

For a business life insurance policy, the owner or partners can be the policyholders, or the policy can name a key employee. The key person’s life insurance is for an essential employee who is invaluable to the business operations. With key person life insurance, the cash value of the business life insurance policy pays to help the business find and pay a replacement after the key employee’s death.

Death Benefit

The business is the beneficiary and receives the cash value of the death benefit. The monies received from the business life insurance policy death benefit can be used to pay business partners for their share of the business or pay business loans or debt.

Lost Revenue

It makes sense that a business would experience a loss of income while it’s in flux due to the passing of an owner, business partner, or key employee. The death benefit monies can be used to cover business expenses.

Buy-Sell Agreement

With a Buy-Sell Agreement, each business partner takes out a policy on the other, or others. In the event of a business partner’s death, the death benefit payout is used by the surviving owners or business partners to buy out the deceased partner’s share. A Buy-Sell agreement should be defined in the business’s operating agreement.

Accelerate Benefits Riders

It will cost more but you can add riders to cover key employees such as the owner or partners should they become seriously ill, need nursing home care, or become disabled. The addition of accelerated benefits can be defined in buy-sell agreements.

What is Not Covered by Small Business Life Insurance?

A person’s personal debt, loss of income, and personal estate taxes are not covered by a small business life insurance policy.

As part of retirement planning and an estate plan, an individual should obtain individual life insurance coverage, so that death benefits can be paid to a family member or members.

How Much is Life Insurance for Business Owners?

The cost varies widely. Term insurance is less expensive than whole life insurance, for example.

Since term insurance is comparatively less expensive, many business owners opt for that. They get term insurance for the same length of time as a significant business debt. For example, the business has a 15-year loan on equipment worth $200,000. Business owners could get a term insurance policy for 15 years, worth $200,000 so that the loan would be paid.

Life insurance policies purchased as part of buy-sell agreements will vary in cost based on the status, such as age, of each insured employee. Those policies can be term or whole life insurance policies.

Fortunately, each company that provides life insurance for business has a formula. One of the best formulas we’ve found was developed by Affordable Life USA.

Life business insurance is calculated on a number of factors. An insurance company will want to know the age of the business owners, partners or key employees. The insurance company will want to know the dollar amount of the policy sought, and the length of time to be paid in. Also, they can be term or whole life insurance policies, with whole life insurance usually more expensive.

Here are some ballpark numbers: A 30-year-old business owner who wanted a $500,000 policy for 10 years would pay about $15 monthly. A 50-year-old business owner who wanted a $1 million policy for 30 years would be paying $252 monthly.

When making financial decisions for your small business or startup, it can be tempting to cut costs by only signing up for the business insurance you’re legally required to have. However, just one uninsured accident can cost more than your monthly premium – it can cost you your business. With many types of business insurance available, it can be tough to know just which kinds you need. Small business owners should analyze their needs to make strategic decisions about which plans are right for them.

What is business insurance, and why do you need it?

When accidents happen, you want to be protected. Business insurance protects your business from financial loss during times of crisis or unforeseen events. There is no one-size-fits-all business insurance; instead, there are several types of insurance that can protect your business, and the exact combination of policies you need depends on your unique circumstances.

“[Business insurance] assists in legal payment, claims, employees’ issues and business property in case anything goes wrong because of your business activities,” Phil Crippen, business advisor at John Adams IT, told Business News Daily. “It can help towards the cost of compensation claims and legal fees, as well as damage to your property or employee-related issues.”

The benefits of insurance are often related to financial and legal protection. Insurance can protect you from a variety of losses – for example, if an employee is injured, your office building burns down, a client tries to sue you, or your business partner passes away. The right business insurance can help you recover and continue operating your business.

“As a business owner, you define what the right insurance is going to be,” said Seth Morton, MBA, licensed insurance agent and owner of Morton Insurance. “Insurance itself is simply an agreement by an insurance company to pay the insured for business losses. To determine what should be insured, a business owner needs to analyze his risk. Once the scope has been established, the owner can evaluate the cost of insurance versus the risk of loss.”

Key takeaway: Business insurance gives you financial and legal protection in a crisis or unforeseen event.

What does business insurance cover?

Business insurance can cover a litany of things, depending on the type. It ranges from basic to comprehensive, so you will want to choose coverage that adequately protects your property, people and business processes.

Morton listed 10 common aspects of a business that insurance can cover and protect:

• Lives of the business principals
• Lives of key employees
• Lives of an employee group
• Long- and short-term disability of owners and employees
• Liability for injury to owners and employees
• Property and casualty coverage for buildings and machinery
• Liability for and damage to business transportation assets
• Product liability
• Employee health insurance for sickness and injury
• Workers’ compensation for earnings lost due to injury

Key takeaway: Business insurance can financially and legally protect the main elements of your business, including your property, people and business processes.

How much does business insurance cost?

The type of business insurance you purchase dictates your monthly costs. According to Progressive, the average cost of business insurance is $53 per month for general liability and $85 for workers’ compensation. Some business owners purchase a business owner’s policy, which combines liability and property coverage in one policy. The average cost for a business owner’s policy is $80 per month.

Another factor that impacts how much you pay each month is your business type. For instance, builders pay a lot more for business insurance than accountants. The reason for the increase is related to the hazards associated with the job – there is a greater inherent risk of injury and potential damage if you operate a construction firm versus if you run a small accounting firm.

Business size, or the number of employees your company has, is also a cost consideration. Each employee poses a potential risk for your business, which raises your monthly premium.

Finally, coverage amounts influence cost. The higher the coverage, the more you will pay. One way to offset the cost if you choose a higher coverage is to have a higher deductible (which is the amount of money you pay out of pocket before the insurer will pay for a covered loss). Assuming greater risk can lower your monthly premiums. Many insurance companies offer you a choice of the deductible. The amounts can range from a few hundred dollars ($250) to thousands of dollars ($2,500).

In the event of a claim, business insurance is normally payable directly to the company. As an example, if your business is damaged during a fire, you would file a claim. An adjuster assesses the damage and decides on the cost to repair or replace the damaged property or items. Once you pay your policy’s deductible, the insurance company cuts a check to the business based on the parameters of the policy.

Types of business insurance

There are numerous types of business insurance available, and you will likely need a combination of multiple policies to protect your business. It is highly recommended that you speak to an insurance expert to identify the specific policies necessary for your company. However, these are some primary types of insurance that most small businesses will need.

• Business owners policy: A BOP is usually a combination of general liability coverage (e.g., bodily injury, property damage, personal or advertising injury, medical payments, products-completed operations, and damages to premises rented) and property insurance. You can also add an employment practices liability insurance (EPLI) policy to your BOP to cover your employees.
• Business interruption insurance: Also known as business income insurance, this is one of the most common types of business insurance. It helps you recover lost income and pay operating expenses (e.g., mortgage, rent, payroll, loan payments, taxes) if your business is forced to shut down because of disasters like a fire, flood, theft or collapsed building. It can sometimes be bundled with your BOP.
• Management liability insurance: Another comprehensive insurance package you may need is management liability insurance. This often combines insurance coverage like employment practices liability (essential protection for businesses with employees), fiduciary liability, and directors and officers (D&O) liability (essential protection for businesses with a board of directors).
• Workers’ compensation insurance: If an employee is injured at work, workers’ comp can cover their medical costs or lost wages. Workers’ comp and disability insurance are often required by law.
• Errors and omissions (E&O) insurance: If you offer professional services, you will want to acquire E&O insurance, also known as professional liability insurance. This type of coverage protects you in the event that a customer or client claims your services caused them financial distress. This is especially important for consultants and financial advisors.
• Product liability insurance: Small businesses often need product liability insurance to protect themselves against product-related claims. If your product causes damage or injury to a third party, or your business faces a product-related lawsuit, product liability insurance can help cover your protection and security.
• Auto insurance: If you or your employees use vehicles for business purposes, you will need some form of vehicle insurance. Whether you need personal or commercial auto insurance depends on the type of vehicles you use, what you use them for, and how much coverage you need.
• Cyber insurance: Every small business owner should protect their data and technology with cyber insurance. If your business technology is hacked or data is leaked, cyber insurance (data breach insurance or cyber liability insurance) can help cover the costs of the damage.

These are just a few of the common types of insurance small business owners should consider. You should seek professional assistance to find the coverage that best protects your specific business.

Key takeaway: The types of insurance coverage you need depend on your specific business, as well as the laws regulating your state and industry.

How to determine what types of insurance your business needs

The best insurance for your business depends on your unique needs. To determine what types of insurance you need, you will have to undergo a careful analysis of your business. It is always advisable to speak with an insurance expert to find the right combination of coverage to keep your business legally compliant and financially protected.

Follow these four steps to determine what insurance your business needs.

1. Analyze your legal responsibilities and business assets.

First and foremost, you should do a careful evaluation of your business and assets to determine what you want to insure. What insurance are you legally required to have, and where do your additional liabilities lie?

For example, Morton said a machine shop might want to insure employees for injury, whereas a jeweler might want protection against theft. Owners of a large distribution company would insure inventory as well as employees, as required by law.

“Each state has different requirements, and business owners should consult with professionals in the state where they operate to determine what to insure,” said Morton.

2. Analyze your risk.

Analyze your additional risk and liability. This will help you determine which insurance will offer the right type of protection. For example, if your business is situated on the bottom floor of an office building in a region prone to floods, you will likely want comprehensive flood insurance, whereas a business operating in a dangerous industry will likely want insurance to cover the risk of its employees getting injured.

“In general, careful analysis of business operations, including human resources and facilities, helps determine where the risks are and what should be insured,” said Morton. “Beyond what could be called insurance for the operation of the business, there is the question of succession planning. What is the plan if an owner dies or is incapacitated, and how is it funded? It is an area often overlooked by business owners and requires professional help to set it up correctly.”

3. Determine how comprehensive you want your insurance to be.

Depending on what you are insuring, you may need a basic level of insurance or comprehensive insurance that covers all aspects of the potential loss. You will have to factor in how costly the loss would be and assess the probability of it happening. This will minimize the risk of overpaying for coverage you don’t need, or skimping on coverage that is imperative for your protection.

4. Pick a provider.

Insurance providers aren’t all the same. Policies, premiums and coverage vary, so do some research to find the best one to protect your business. Choose a few top providers, and compare them by policy coverage, cost, reliability, customer service and how they handle claims. This will help you find the best insurance provider for your business.

Key takeaway: To determine what business insurance you need, you’ll need to analyze your operations, assets, risks and liabilities. Then, determine how comprehensive you want your policies to be and compare providers.

Editor’s note: The contents of this article do not offer legal, business or insurance advice related to the needs of any specific individual business. Please consult your attorney and/or small business insurer to discuss your situation and coverage.

Your Guide to Choosing Small Business Insurance [Businessnewsdaily]

There is something to be said for a good productive meeting. However, there are many meetings in which almost nothing gets accomplished. Furthermore, said meetings also keep people from being productive and affect job performance. And according to the 2021 State of Meetings Report from Doodle, it does have an impact.

In this week’s roundup, 56% of Employees Believe Too Many Meetings Affecting Job Performance is an article that looks at the Doodle report and the data in it. And what stands out is the growth of virtual meetings in the past year, a whopping 1,230% in 1:1 meetings. This is not surprising considering the pandemic, but in-person meetings still made up more than half of the meetings. The takeaway from the report is virtual meetings are here to stay even post-pandemic. And for small businesses looking to save on business trips, the trend is very much welcomed.

A couple of other articles in the roundup also address the issue of remote work and virtual events. “GoTo has a New Virtual Events Solution” and “These are the Best Cities for Remote Workers in 2021” look at the current state of remote work and solutions that are in the market to address the technology they need.

For small businesses looking to remain competitive, it means staying informed about the technologies and workforce trends that are taking place today. Small Business Trends provides this content so you can stay ahead of the curve and keep your business thriving.

Nimble Announces New CRM Integration with Microsoft Teams

Nimble, a global leader in providing simple and smart CRM for small business teams, has announced a new CRM integration with Microsoft Teams. The integration is designed to power Nimble customers’ virtual business engagements. Nimble Announces Integration with Microsoft Teams Nimble recognizes that customer data is at the heart of every business.

GoTo has a New Virtual Events Solution

GoTo’s new virtual events solution addresses a pressing need for businesses to reach a larger audience. Whether you want to reach local, national, or international audiences, GoTo can bring them together under one platform. GoTo Virtual Events Solution The biggest key to virtual event adoption is simplifying the technology so any business can use it.

These are the Best Cities for Remote Workers in 2021

According to the Best Cities for Remote Workers 2021 survey, Provo is the number one city for remote workers. The infrastructure, amenities, and affordability make Provo a destination worth looking at. And as more companies offer full-time remote work, people are going to be looking for cities that are cheaper while providing the amenities they need to make their lives comfortable.

Deducting Start-Up and Organizational Costs

Based on U.S. Census Bureau data for business applications, new business formation is on the uptick. The pandemic forced many business closures, but this data show the entrepreneurial spirit will not be stifled. If you’re thinking of starting a business now, recognize that it may be costly to get started and sometime before you begin to bring in revenue.

Guide to Restaurant Week Success

As a restaurant owner, it is crucial to identify opportunities that can help your business gain exposure, and help new customers learn about your restaurant. One of the ways to accomplish this is by participating in events such as Restaurant Week. In this article, we’ll break down everything you need to know to have a successful Restaurant Week.

How to Choose the Right CRM System

A customer relationship management (CRM) manages your small business interactions with clients. The right CRM has the tools and features that include lead tracking, contact management, and other items. What is a CRM System? This software for your business guides prospects through the sales pipeline. There are different plans and packages to choose from.

Is Blogging Still Worth It?

With the rise of social media, live video, podcasting, and other digital marketing trends, it’s easy to feel as if blogging has lagged behind. But even in a world where there are “sexier” options, blogging still has a place at the table. The Benefits of Blogging Blogging has been around since the dawn of the internet.

Pros and Cons of an LLC

Forming a limited liability company can be the perfect strategy for a business. There’s a reason that it’s been the most common business entity in the US for the past 20 years. One of the main reasons that a business or a group of people, form LLCs is to protect personal assets. Just as it sounds, there’s limited liability for owners of the business.

How to Start a Fish Farming Business

There are several types of fishing farming businesses. You can grow fish to be eaten as, to be stocked for anglers, or to supply aquariums. Fish farming doesn’t always require a large body of water. For many species, fish farms can be located indoors or outdoors. Getting started raising farmed fish does require a significant financial outlay.

How to Start a Business: Step by Step Guide

Talk to any entrepreneur or small business owner, and you’ll quickly learn that starting a business requires a lot of work. An idea doesn’t become a business without effort. Some budding entrepreneurs understand the effort necessary to create a business, but they might not be familiar with the many steps required to launch a business venture.

In the News: Are Too Many Meetings Affecting Your Productivity? [Smallbiztrends]

Business and employees have all but confirmed that a hybrid working model will become the dominant way of working following the pandemic. Despite a few road bumps, the transition to remote working has been successful, with many businesses beginning to see the potential to regain losses and match their pre-pandemic growth. Similarly, the vast majority of former commuters have embraced the remote working model so strongly that most employees don’t want to go back to the office full time again.

The physical workplace is not dead, however, and will play an important part in rebuilding the economy. Office and remote working can and will exist to produce great results, but this will rely on the right IT investments being made at the right times.

Namely, it is key that we do not repeat the mistakes that defined IT in 2020, in which rushed digital transformation projects traded the short-term ability to work from home, for long-term infrastructure and cybersecurity issues. Equally, businesses cannot simply look to maintain quick fix solutions that may have enabled remote working but may not easily translate into hybrid working.. Optimising the use of technology for hybrid working will require a seamless blend between remote and office work, and businesses will now need to plan for a workplace that is inclusive, flexible, and secure.

Ensuring a connected workplace

With many staff hoping to maintain a certain amount of post-pandemic homeworking, businesses need to ensure that connecting from any location is as smooth as possible, and exchanges with colleagues are seamless. However, the real challenge will come when people are able to meet in person, with others dialling in from afar. If the process is not straightforward and hiccup-free for those dialling in, it can have a serious effect on collaboration among teams, with office and home-workers becoming two separate groups. It can also lead to unequal employee representation, with some people’s thoughts, ideas or opinions being overlooked. Smart meeting rooms will therefore be an important investment for businesses looking to go hybrid.

These intelligent spaces integrate hardware and software to create a productive meeting experience for participants, whether they are joining the meeting from the office or remotely. There are new tools appearing every day to compliment these spaces, such as Microsoft’s employee experience platform Viva, and intelligent collaboration devices such as Microsoft Surface Hubs or Poly Meeting Room solution, which record and take notes during meetings. Effectively linked together, these tools can help create a seamless working environment and eliminate the risk of those staying out-of-office falling behind. In the not-too-distant future, we will see AR and VR integrate into meeting room spaces to take that experience to the next level and give collaboration another dimension. Securing the transition

As businesses swiftly responded to lockdown measures and switched employees to a home working dynamic, so too did cyber criminals, who switched tactics to exploit COVID-19-related fears. Working from home quickly became a gateway to new forms of data theft. In a survey of workers from Deloitte, a quarter of respondents noticed an increase in fraudulent emails, spam, and phishing attempts since the beginning of the COVID-19 crisis. Fraudsters are watching behaviours, devising scams to fit perfectly into the ‘new normal’ – from false Microsoft Teams notifications to Royal Mail scams taking advantage of the increase in home parcel deliveries.

Given the speed with which we had to adapt to home working, it could be forgiven that corporate IT infrastructure was inadequate for a short time while people got used to the new way of working. However, those who are lagging behind with their security infrastructure could pay dearly. For those looking to a hybrid workplace model for the future, staff and data security is paramount.

Creating a security strategy involves several elements, one of which is staff education and ongoing training. With 52% of businesses admitting that employees are their biggest weakness in IT security, comprehensive education of the risks out there and how to spot them is an essential building block to a secure IT infrastructure. This training should be regularly updated to represent the changing conditions of the workplace. Cyber criminals will adapt; therefore, so must organisations and employees. Once a cyber defence has been deployed, it’s then crucial to regularly check that the security measures are effective. In 2020 in particular, many solutions were rolled out under significant time pressures and IT staff now need to evaluate these solutions and adjust them if necessary. If businesses now operate with more cloud-based storage, it’s fundamental to check that is this properly managed and protected from attacks. It’s crucial not to forget to validate the security of service providers, suppliers and partners too. After all, supply chain weaknesses can lead to major cyber and data breaches.

Striving towards greater inclusion

One of the great casualties of the last year has been workplace culture and a lost sense of community among workers. While office culture was due an overhaul, there are concerns that a permanent remote-only way of working will leave some staff excluded and missing the key social element of work. Employee wellbeing and job satisfaction are also more difficult to track when teams are remote. This is where behavioural analytics tools can play a key role, by analysing behavioural patterns to understand employee activity and help ensure remote working is enjoyable and sustainable for everyone.

The insights that are unlocked by this technology will be invaluable in 2021, as they can also provide businesses with insights into employee working patterns. When these tools are combined with data sources, such as networks and smart meeting rooms, this provides business leaders with an all-important overview of employee engagement. From here, it’s possible to evaluate the true feeling of employees and understand if anyone does not feel included, and why. In addition to being separated by geography, some social groups are more at risk from becoming isolated than others, and business leaders must take extra steps to ensure that everyone feels invested in. Technology plays an essential role in this. Armed with the right tools and data, leaders can take effective steps to include staff members in this new way of working.

‘Going to work’ may never take on quite the same meaning as it did before, and businesses leaders must remember that there is not a one-size-fits-all approach that will meet every need. The process of hybrid working will require us all to learn and evaluate our own unique goals and challenges. Like all IT investments, this will also mean that strong foundations need to be laid around security and connection, with the entire team being involved in the process. Eventually, once we’ve hit the hybrid working nail on the head, I think we will all wonder why it was not the norm to begin with.

The fundamentals for a hybrid workplace [Bdaily]