Business succession planning otherwise known as business continuity planning is one of the most neglected areas of planning for business owners. Some studies show that only 26% of business owners have a written continuation plan, and of owners over age 60, only half have put their plans in writing.

Your business is your livelihood so it's important to know that its heart will keep beating whenever life-changing events occur to you, your partners and your heirs. 

Business continuation insurance protects your company from financial loss caused by the death or the long-term disability of a key employee.

Should you have a business continuation plan?

Yes, if you have a major financial interest in a company that could be jeopardized by the death or disability of a partner or other key employee.

Types of Business Continuation Insurance:

• Business overhead expense (BOE) insurance - This is a special form of disability insurance that provides a means of paying your company's overhead expenses, such as rent and utilities, during the time that you're disabled.
• Key person disability insurance - This type of insurance protects your business in the event that you (or any partners) are unable to perform critical contributions required for the success of the firm.
• Key person life insurance - This provides funds to your business to pay for losses incurred by the death of a key employee or partner.
• Life and disability insurance to fund a buy-sell agreement - Provides the liquidity needed in the event of death or a long-term disability. The buyout can be with business partners, family members, key employees or even a competitor.

Developing A Succession Plan

In its most basic form, a succession plan provides a road map for your partners, heirs and successors in the event of your death, disability or retirement. It can also be used to orchestrate the sale of your business. Your plan can include:

• The distribution of business stock and other assets.
• Debt retirement schedules.
• Life and disability insurance policies.
• Buy-sell agreements between partners and heirs.
• The division of responsibilities among successors.
• Determination of the value of the business.

Business succession planning is often a complicated process involving numerous legal and tax issues as well as family relationship matters. Brown & Brown will consult with your accountant and attorney to help you evaluate your options for creating a strong plan.

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For More Information
Contact a financial service professional at 800-444-1974 to ensure that the future of your business is protected.