Key person insurance that funds the next decision.
Key person insurance, buy and sell agreement funding, and partnership protection. Business cover is about giving the surviving owners cash to act rather than time to scramble.
What business insurance covers.
Personal cover protects the family. Business cover protects the entity, the partners, and the value built into the business. Without it, a death or permanent disability can force a sale at the worst possible moment. The personal layer (life, TPD, and income protection) still has to be in place underneath.
- +Revenue tied to people
Many businesses have one or two people who carry most of the relationships, technical knowledge, or sales. Replacing them takes months and money.
- +Capital tied up in the business
Owners often have most of their net worth inside the entity. Buy and sell cover converts that illiquid capital into cash at the right moment.
- +Personal guarantees on debt
Most business loans require personal guarantees. Cover should be sized to clear them if the guarantor is no longer there.
- +Succession that does not happen by accident
Without funded agreements, succession becomes a negotiation between grieving spouses and busy partners. Funded agreements remove that conversation.
The six covers that sit under business protection.
Business cover is rarely one product. It is a set of policies sized against the specific risks that sit inside the entity.
Key person revenue cover
Protects the business against the loss of revenue tied to a key individual. The lump sum funds replacement, recruitment, and the trading gap.
Key person capital cover
Replaces the capital value a key person brings to the business, including loans they have provided or guarantees they have given.
Buy and sell agreement funding
Life, TPD, and trauma cover sized to fund the buyout of a departing owner's interest under a properly drafted buy and sell agreement.
Partnership protection
Cover that lets the surviving partners buy the departing partner's share without forcing a sale of the business or borrowing under duress.
Business expenses cover
Reimburses fixed business overheads if the owner is off work through illness or injury. Rent, utilities, employee wages, lease payments.
Guarantor protection
Cover sized to clear personal guarantees on business borrowings if the guarantor dies or is permanently disabled.
How a funded buy and sell works.
The legal agreement and the insurance have to be set up together. The agreement sets the trigger; the insurance funds the buyout. Medical practice partnerships in particular carry traps that we work through on the cover advice for doctors page.
Valuation
Agree the method for valuing each owner's share. Annual review keeps the number current.
Legal agreement
Solicitor drafts the buy and sell agreement, defining triggers, valuation, and payment terms.
Insurance placed
Life, TPD, and trauma cover placed with ownership matched to the agreement.
Trigger and pay
On a trigger event, the policy pays, the agreement settles, and the surviving owners take full control.
We coordinate with your other advisers.
Business cover sits across legal, accounting, and financial advice. We work with your existing solicitor and accountant rather than asking you to start over.
- +Your solicitor
Drafts and updates the buy and sell or partnership agreement. We give them the policy ownership detail to match.
- +Your accountant
Sets the valuation methodology and confirms tax treatment of premiums and proceeds for the specific structure.
- +Your business banker
Personal guarantees on facilities. Cover sized to clear them is part of the package.
- +You and your partners
The conversation people often avoid. We chair it so the agreement reflects what each owner actually wants.
Credentials and licensing.
- Practitioner
- Balki Balakrishnan
- Experience
- 12+ years on personal and business risk
- Membership
- FAAA
- Authorisation
- AR 409415 of La Verne Capital Pty Ltd
- Focus
- Owner-managed businesses and professional practices
- Standalone reviews
- Available without a full plan
Business cover sits alongside the four personal covers we arrange most often: income protection, TPD, trauma, and life. Recommendations require personal advice and sit inside the financial planning pillar.
The questions owners ask before booking.
Anyone whose loss would materially affect revenue, financing, or operations. Founders, rainmakers, technical leads, or the principal of a professional practice. The test is whether the business would feel the gap in dollars and cents.
A legal agreement between the owners that triggers a buyout if one of them dies, becomes permanently disabled, or suffers a defined trauma. Insurance funds the buyout so the surviving owners can pay the departing owner or their estate without selling the business. The legal agreement and the insurance need to line up exactly.
It depends on the structure. Self-ownership, cross-ownership, and trust ownership each have different tax and stamp-duty consequences. We coordinate with your accountant and solicitor to settle the ownership before the cover is placed.
Key person revenue cover premiums may be deductible to the business when held for a revenue purpose. Capital cover premiums are generally not deductible, and the proceeds are usually not taxed. The structure dictates the tax treatment. We work through this case by case with the accountant on the file.
At least annually, and whenever a major event changes the value of the business or the ownership structure. A new partner, a debt facility, a contract win, or a change of legal structure can all change the sum that needs to be on the books.
Read on adjacent cover
- All personal risk coverBusiness cover in context with the four personal covers we advise on.
- Income protection insuranceMonthly benefit for the owner if illness or injury keeps them out of the business.
- TPD insuranceLump sum if an owner can never return to work. A core buy and sell trigger.
- Trauma insuranceCritical illness lump sum on diagnosis. Used in trauma-triggered buyouts.
- Life insuranceLump sum on death or terminal illness. The foundation of most buy and sell funding.
- Insurance for doctorsPractice-owner cover and partnership protection for medical professionals.
Information on this page is general in nature. It does not take into account your personal objectives, financial situation, or needs. Read the relevant Product Disclosure Statement and consider whether personal advice is appropriate before acquiring any insurance product mentioned here.
Book a free business cover review.
An hour on the file with you and, if useful, your accountant and solicitor. We will tell you what is funded, what is not, and what to do about it.