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Business
Continuation Planning
As businesses are generally
owned by one or more individuals, business continuation planning
addresses what is to be done in the event of a business owner's
death, disability, voluntary termination, or bankruptcy. Without
an agreement, the death of a business owner could result in
the termination of the business or cause a surviving spouse
to become a partner or co-owner with the existing business owners.
Generally this is not desirable.
A Buy/Sell agreement is drafted by an attorney to address these
and other possible issues. Life and disability insurance are
used in the planning process to provide the funding to guarantee
the financial aspects of the agreement.
Key Person Life or Disability
If the death or disability
of a key executive would cause financial harm to your business,
key person insurance coverage may be necessary to indemnify
your company against an untimely death or disability. For
example, if certain client relationships were jeopardized
or banking lines of credit were called into question as a
result of a death, corporate profits may suffer. Key person
life or disability insurance could be used to protect a company
from such an event.
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