As an entrepreneur, it is not uncommon to chase clients for payment from time to time. But what would happen if you dedicated your entire team to a project that never got paid? You could find yourself in a delicate financial situation and lose credibility.
Plan your protection for this scenario with insurance that pays compensation in the event of client non-payment. It ensures that you can continue to pay your employees, invoices and monthly loans without serious impact on your business.
When you take out a business mortgage loan or personal loan or start using your line of credit for your business, consider insuring the payments with critical illness, disability or life insurance.
This coverage can provide critical support toward paying all or a portion of your monthly payments while you focus on getting well or your associates recover after your death. Check with your advisor, who is there to help you determine which product you need: loan insurance in case of death or disability, personal life insurance or personal disability and critical illness insurance according to your type of business (incorporated, limited liability or self-employed).
Sometimes, simply insuring yourself for the replacement or repair of damaged assets is not enough: you also need to protect yourself against lost revenue due to this damage, for example, disruption of your business activities or the loss of important contracts. Such losses could affect your financial stability and leave you requiring assistance to continue paying your loans, whether for your commercial infrastructure or vehicles. Be assured that you can protect yourself from direct or indirect loss of revenue.
Speak to your advisor about your work and risks: he or she can guide you in choosing the amounts and options you need to compensate for potential lost revenue.
If your office or warehouse is destroyed by fire or another major disaster, or if your commercial vehicle is written off after an accident, you are still responsible for reimbursing all associated loans.
Ask your advisor to add the loan repayment option to your credit insurance in the event of major disaster. This protects you against having to pay for assets you no longer possess.