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. + 31