Risk Insurance

Risk Insurance 101: How to prevent your start-up from becoming a statistic

13 August 2020
2 min read

14 August 2020

It’s hard work getting a new business off the ground, with many failing within the first two years. Fortunately, there are ways small business owners can protect themselves to help ensure they don’t become another statistic.

When you start a new business, you need to invest a lot of time and resources. Business owners often end up taking on debt and leveraging assets they own to get their business going.

While they’re likely to protect their physical assets in this scenario, it’s not so common for business owners to protect themselves. Cashflow might be tight but neglecting to protect your personal risk can have a devastating effect on business survival rates.

So how can you, as a small business owner, protect yourself to ensure you don’t become another statistic?

  • Review your ACC cover and make sure it's working efficiently.

  • Consider your current debt and what level of protection you need, considering any personal guarantees. Does this debt need protecting?

  • Consider how you would replace your income if you suffered an accident, injury, or illness. Would replacement labour be required to keep the business going?

An alternative option is Start-Up Business Income Protection, which is designed specifically for businesses less than three years old, so doesn’t require proof of income.

Income protection can provide an Agreed Value monthly sum assured for either the lesser of up to two years or until you are well enough to return to work full time. Once the business is considered financially stable (three years) it can then be converted to standard cover with higher sums assured and longer coverage periods.

Applying for personal risk cover is straightforward and the Findex Risk Insurance team can guide you through a three-step process:

  1. Identify your individual needs and requirements.

  2. Present the solution that best meets your needs and budget.

  3. If applicable, complete application forms.

To get started, speak to your financial adviser, who can put you in touch with one of our risk specialists or get in contact with our Risk Insurance team for more information.