You’ve Built a Business - But Have You Protected Yourself?

When you own a business, you probably don't think of yourself as having a long list of different roles.

You're simply getting on with the job.

But look a little closer and you might realise that, as a business owner, you're wearing several hats at once.

You're an employee.
An owner.
A shareholder.
A decision-maker.
A key person.
An income earner.
Perhaps a borrower or guarantor.
And, outside of the business, you're likely a partner, parent or family provider too.

That's a lot of responsibility sitting with one person.

So while you've spent years building and protecting your business, have you thought about protecting yourself?

You're more than the person who owns the business

For an employee, their income generally comes from their employer.

For a business owner, the situation can be more complicated.

Your income might come from the business you've built. Your ability to earn that income may depend on your own health and ability to work.

At the same time, the business may depend on you to generate revenue, manage clients, make decisions and keep things moving.

This creates an important connection between your personal financial security and the financial health of your business.

If something happens to you, both can potentially be affected.

The many hats of a business owner

Think about the different roles you might play.

You're an income earner

Your business may provide your primary source of personal income.

That income might pay your mortgage, support your family, fund your lifestyle and help you build wealth for the future.

If illness or injury prevents you from working, your personal finances can be affected.

This is where personal protection such as Income Protection or Trauma Cover may be relevant, depending on your circumstances and the policy arrangements.

You're a key person

Your business may rely heavily on your knowledge, relationships, skills and experience.

If you couldn't work, someone else may need to take over some or all of your responsibilities.

The business could face reduced revenue, additional costs or disruption while it adjusts.

Key Person protection can be considered as part of a wider strategy for managing this type of business risk.

You're a shareholder

If you own shares in a company, those shares are an asset.

If you die, what happens to those shares?

Your family may have an interest in the value of your ownership, while your fellow shareholders may have an interest in maintaining control and ownership of the business.

Shareholder Protection can form part of an arrangement designed to provide funding for the potential purchase of shares following an insured event, depending on how the arrangement has been structured.

You may also be a debtor or guarantor

Business owners often have financial commitments connected to their businesses.

There could be business lending, equipment finance or other borrowing.

You may also have personally guaranteed some of the business's debt.

If your circumstances change, the debt doesn't necessarily disappear.

This is why understanding how personal and business debts are connected can be an important part of business protection planning.

Then there is your family

Perhaps the most important hat you wear has nothing to do with the business.

You're a partner.

A parent.

A provider.

A member of a family that depends on you in different ways.

Your business may provide the income that supports your household. Your ownership interest may represent a significant part of your family's financial assets. Your ability to work may be central to your family's plans.

So if something happens to you, the consequences can extend across both sides of your life.

Personal risk can become business risk. Business risk can become personal risk.

One event can affect multiple areas

Imagine a business owner becomes seriously ill.

They can't work for several months.

Their personal income falls.

At the same time, the business loses the person who was responsible for major client relationships and important decisions.

Revenue is affected.

Additional staff or contractors need to be brought in.

The business still has expenses and debt to service.

Meanwhile, the owner's household still has a mortgage, bills and other financial commitments.

One event has created several different financial pressures.

This is why looking at personal and business protection separately can sometimes leave gaps.

What would happen if you couldn't work?

It can be useful to take off the business-owner hat for a moment and simply look at your own situation.

Ask yourself:

If I couldn't work for six months, what would happen?

Then look at the business:

If I couldn't work for six months, what would happen to the business?

And then look further ahead:

If I wasn't able to return to work, what would happen to my family, my business and my ownership interests?

You might discover that you have several different risks that need to be considered.

That's not necessarily a reason to have more insurance.

It's a reason to understand the risks first.

Protection isn't about covering every possibility

It's tempting to think that protecting yourself means having a policy for every conceivable event.

It doesn't.

Good protection planning starts with understanding what you already have, what you rely on, what could realistically create financial pressure and what resources you would have available if circumstances changed.

You may have savings.

Your partner may have an income.

Your business may have cash reserves.

You may already have personal or business insurance.

Your shareholders' agreement may provide certain protections.

The important thing is understanding how all these pieces fit together.

Protecting the person behind the business

You've probably spent years thinking about how to protect your business.

You've considered contracts, accounting, compliance, cybersecurity, property, employees and business risks.

But sometimes the most important risk to the business is sitting at the desk in front of you.

You.

Your knowledge.

Your relationships.

Your income.

Your ownership.

Your decision-making.

Your ability to keep everything moving.

And beyond the business, there are the people who rely on you.

That's why business owner protection isn't simply a business conversation.

It's a personal one too.

You've built something worth protecting

Building a business takes commitment.

You've invested your time, energy and expertise into creating something that provides value for your clients, your employees, your family and yourself.

Protecting that investment doesn't mean expecting something to go wrong.

It means understanding what would happen if circumstances changed — and deciding whether you have enough financial resilience and protection in place to deal with it.

Because when you're the person behind the business, protecting the business often starts with protecting yourself.

If you're a business owner, it can be useful to review your personal and business protection together rather than treating them as completely separate areas. At New Vision Financial Services, we can help you understand how different types of personal and business insurance may fit together with your financial commitments, ownership arrangements and plans for the future.

Nimalka Perera
Business Development Manager
New Vision Financial Services

Plan your future and let us help you have peace of mind along the way.