If you have every invested your hard earned money in a business venture you will know that it can be a very large risk to take. As in all things, there are ways to reduce your exposure to the risk of investment, one of these options in through Insurance.

While you cannot insure the loss of your investment capital or poor management of the business, there are insurances that can be applied to limit your exposure should an unforeseen event occur to the business:

• Partnership Agreement Funding
• Business Interruption
• Key Personnel Insurance

Partnership Agreement Funding

Whenever you invest your money with other partners it is a must to arrange a partnership agreement. This agreement will outline what should happen to the share of the business in the event of the death or withdrawal of a partner. The agreement should be prepared by a solicitor and must be signed by all partners in the investment.

As part of the agreement Life and Trauma cover should be put in place on each of the investors. This would provide the monetary payments for the agreement in the event of a death or serious illness to an investment partner.

Business Interruption

IT is also important to consider what would happen if the Business was unable to operate due to a Malicious Damage or damage as a result of a storm or fire (or any event under Fire & Perils)? Business Interruption cover will provide cover for Loss of Gross Profit & can cover the cost of relocating the business if the current premises are unable to be used.

Loss of gross profit is determined by taking the Gross Loss of profit as a result of the event and subtracting the cost of purchased goods.

Key Personnel Insurance

The final consideration is what happens to your investment should a key staff member such as a Manager or Salesman be unable to work due to illness or injury. Not only does this creates a cost to your business, being an unproductive wage, but also reduces the productivity of your business.

By insuring the income of the key personnel through Income Protection the cost of the injured or sick staff member is paid to the company by the insurance company whilst they are on a claim. This then allows the company to divert the wage costs into the hiring of replacement staff to maintain the productivity level.

Newer products in the market also allow for the staff member who is on a claim to continue to work a minimal number of hours (approximately 10 hours) each week whilst the claim payments are still made.  Call us for more information on this product and many others.

As you can see there are a number of insurances that can be applied to an investment to help prevent you losing your money. While it will not pay back your money in the event of the investment failing, it will help to prevent the investment from failing due to an unforeseen event.