A little mistake, which costs the self-employed
Written on the 23 January 2014 by Arrow
You have worked hard to build your business and most likely you rely on your business, and your business relies on you. JANET CULPITT examines a question – what if you were unable to work in your business for a time?
Years of blood, sweat and tears now mean you own a business that funds your lifestyle and will one day fund your retirement.
Now imagine for a moment what would happen if you suffered an illness or injury that prevented you from working for a few weeks, a few months or even years. What would happen to your business? Your clients? Your employees? Your future?
Failing to protect their business and their income is a common mistake self-employed people make. Income protection insurance and business expenses insurance are essential for self-employed people who do not have luxury of relying on sick leave, annual leave, salary continuance and workers’ compensation in the event of illness or injury.
If you are too ill or injured to work, income protection insurance will provide you with a monthly payment in place of your regular salary, and business expenses insurance will provide you with a monthly payment to cover the costs of ongoing business expenses such as electricity bills, equipment hire and regular advertising costs. And the best part is, the premiums are tax deductible. Premiums are tax deductible if used to protect your assessable income.
Kate’s story: Kate, 48, operated her own graphic design business and employed one fulltime junior designer. The business had been established for several years, and Kate herself had been a local even longer. It was no surprise then, that many of the neighbouring businesses formed Kate’s regular client base. It was part of Kate’s morning routine to jog the nearby coastal track, usually with her energetic Staffordshire bull terrier pulling on the lead. One particular morning, her dog dashed down a flight of concrete stairs faster than Kate could run. Trying to break her fall, Kate ended up with a broken wrist instead.
Because she couldn’t work, Kate’s Business Expense Cover paid her a monthly benefit of $7260. This money allowed her to keep paying her junior designer, and hire a contractor to help manage the workload and pay regular bills. More importantly, it meant Kate could sustain the commitment to her regular clients.
With the insurance benefit helping to keep her business afloat, Kate was able to focus on recovering from her injury – and search for a leash-free dog park.
Whilst insurance cannot prevent serious illnesses and injuries from occurring, it can protect you and your business from the financial consequences such misfortune can bring.
Contact us today if you would like to discuss how we can help protect your income and future.