How long can you afford not to work?

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Do you have the steps in place to protect against a "Trigger" event?

People in small business today, especially start-up business owners, often struggle to balance work and family pressures. Typically the working day starts early, finishes late, and after dinner more work is completed otherwise the wheels will fall off. Is this you? One of the traps of starting and running a small business is putting off or delaying decisions that are important for you to protect your personal, family and business situations. A lack of action now can have a substantial negative impact on an owner’s personal and family situation when an unexpected “triggering event” occurs in the future.

Case Study

Ian recently started a trade business. His family was very supportive of his decision but had some concerns initially due to their high mortgage repayments and kids schooling requirements. Whilst completing a customer’s job, Ian had a major accident that rendered him unable to work for 3 months. Ian had forgotten to purchase insurance. Ian had to drawdown on the family’s entire savings and the equity in their home until he was able to return to work.

Are you at risk from a triggering event?
A triggering event is one that occurs which significantly impacts on your personal, family and business situation. Small business owners can take preventative action to minimize the impact of a triggering event.

The table below lists examples of potential triggering events and suggested preventative actions.

Potential Triggering Event	Prevention Action
Business insolvency	Business plan
Insufficient capital	Budget
Loss of major customer	Customer Relationship Management system
Relationship breakdown	Family life balance charter
Death of a business partner	Partnership agreement and cross insurance
Accident, health scare or death	Personal (Medical/ Life) and Business insurance

How much insurance do you need?

Purchasing insurance is one way of minimizing your risk from a triggering event occurring.

1. Typically small business insurance usually includes:
2. Key Person Insurance - insurance to provide for a lump-sum payment if death occurs.
3. Sickness and Accident Insurance - insurance to replace a loss of income.
4. Trauma and Permanent Disability Insurance - insurance to provide for lump-sum payment if a traumatic health event occurs which causes disability.

It is important to ensure that the insurances which are in place are adequate for your individual circumstances as it is not one size fits all. In addition to this circumstances can change over time i.e. having children, buying a house, buying a business, etc. which will all have different effects on levels of insurance to maintain.   

At SJN Chartered Accountants we can work with your financial planner to assist in this process, or alternatively if you haven’t previously considered insurance we have a vast network of professionals which can advise on insurances for your individual circumstances.

Phone: 8333 7300

Email: info@sjnca.com.au