Insurance Considerations for Small Business Owners
Protecting What You’ve Worked So Hard to Build
Running a small business takes vision, resilience, and no shortage of late nights and tough calls. But what happens if something unexpected affects your ability—or your key team’s ability—to keep the business going?
For small business owners, insurance isn’t just about ticking a box. It’s about protecting the people and assets that keep your business alive. In this post, we’ll explore the types of insurance every small business owner should consider, including often-overlooked but critical covers like key person insurance and shareholder protection.
1. Key Person Insurance
Your business might rely heavily on one or two individuals—often the founders or top salespeople. If one of them were suddenly unable to work due to illness, injury, or worse, the financial impact could be severe.
What is it?
Key person insurance provides a financial payout to the business if a crucial team member becomes seriously ill or passes away. This money can be used to cover lost revenue, recruit and train a replacement, or repay business debt.
Why it matters:
Keeps your business running during a transition
Reassures lenders and investors
Protects your reputation and client relationships
2. Shareholder Protection
If your business has multiple owners, what happens if one of them dies or becomes permanently disabled? Who ends up owning their share of the company?
What is it?
Shareholder protection allows remaining owners to buy out the affected shareholder's interest, using funds from an insurance payout. It usually works alongside a buy-sell agreement.
Why it matters:
Avoids disputes with heirs or estates
Keeps control of the business with those who are active in it
Provides financial certainty for everyone involved
3. Debt Protection Insurance
Many small businesses take on debt to grow—whether it's a business loan, line of credit, or personal guarantee. If a business owner dies or becomes critically ill, that debt doesn’t go away.
What is it?
Debt protection insurance provides a lump sum to repay business loans in the event of death, disability, or trauma. It protects both the business and the owner’s personal assets (especially if personal guarantees are involved).
Why it matters:
Prevents debt from falling to your family or co-owners
Keeps the business solvent during tough times
Gives peace of mind to lenders
4. Other Cover to Consider
Depending on your industry and structure, you may also need:
Public liability insurance – to cover claims from third parties
Business interruption insurance – to replace income after a disruption
Cyber insurance – essential in today's digital world
Health and income protection – for you and your key staff
Final Thoughts
Insurance for small business owners isn’t one-size-fits-all. It’s about creating a strategy that protects you, your people, and the legacy you’re building. By considering key person insurance, shareholder protection, and debt coverage, you’re not just managing risk—you’re building resilience.
Want to make sure you’re covered where it counts?
Chat with the New Vision Financial Services team today—we’ll work with you to tailor cover to your unique business needs.
Glen Hatcher
Financial Adviser
New Vision Financial Services
Plan your future and let us help you have peace of mind along the way.