Risk & Business Magazine Cooke Insurance Risk & Business Magazine Fall 2017 | Page 31

GOLDEN EGGS
Insuring
E
The Goose
With Golden
Eggs
veryone is familiar with the story of the goose that laid the
golden eggs. The goose lays golden eggs and, therefore, the
value of the goose is in keeping it alive and healthy. “Kill
not the goose that lays the golden egg.” In a more modern
setting, consider an ATM machine that continuously spits
out money without stopping. What would happen if you owned that
machine? Would you take steps in advance to protect it and make sure
it stayed functional? Of course. The alternative is letting a stream of
income potentially disappear for no reason other than poor planning.
For business owners, this situation might be more relevant than many
realize. For business owners, they are the ATM machine.
Most business owners have a mindset that should something happen to
them in terms of illness or injury, they can simply take money out of the
company to cover it. Ask yourself this question: If you decided to take a
vacation and not tell anyone for 6–12 months, what shape would your
business be in upon your return? Certainly not the shape that it was in
to begin with. Even worse, that vacation is being paid for through the
company coffers in many cases, damaging the overall financial position
of the company as well.
Let’s face it. Unplanned things happen. You have to prepare for the
unexpected. You get homeowners insurance because of the possibility
that your house could have a fire. You get phone insurance because you
might drop your phone in a pool of water or have it stolen. You get car
insurance because you know accidents could happen. You insure your
business to protect it against a loss. Yet, most business owners don’t
purchase disability insurance to make sure they protect their income.
It’s ironic that given all the insurance business owners purchase, their
income is the one item that they often do not spend the time to review.
It’s almost as if business owners forget how essential they are to the
success of their business and how much revenue and profit would suffer
if they weren’t there on a day-to-day basis.
The number one objection we often hear is “Why do I need it? I’m
healthy, so why should I spend the money?” I would argue that, because
you are healthy, you should consider it. First, it is much harder for
unhealthy people to qualify for the coverage to begin with, but also
because bad things happen equally to healthy people as to unhealthy
people. Things can happen that are outside of your control. A car
can hit anyone, whether they are a star athlete or someone with an
existing autoimmune disorder. The risk doesn’t change. Because you
are healthy, you are likely to be more active and, therefore, at more risk.
But assuming an accident or an illness, which of the two have more
potential for survival, the healthy person or the unhealthy person?
HAVING THE RIGHT COVERAGE IN PLACE CAN HELP YOU ACHIEVE
TWO THINGS:
1. Provide you with a means to replace your income
2. If it comes to that, time to get the fair price for your business as
opposed to have to let it go at a fire sale because you need money to cover
your personal expenses.
Planning can save you a lot of trouble, and the time to review this is
when you are in good condition. If you want to have more information,
a review of your current policies, or to talk more about what you can do
to protect yourself and your business, contact Cooke Insurance today. +
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