#WERK101 Protecting The Empire: The Person, The Business & The Legacy (Part 1)

Part 1 of a three part series on how entrepreneurs can protect themselves and build a legacy while growing their business.

As entrepreneurs we often pour our heart and soul into our business. We spend a lot of time building our brands and structuring our empire without taking the time to protect ourselves from external risks. One mishap has the potential to wipe out all of our efforts. Think about that. Our children’s legacy could be snatched from us as a result of one poor decision. If we don’t take the time to build the proper infrastructure to support our vision, we risk losing it.

There are three layers to protecting your empire: the person, the business, and the legacy. In this three part series I will give you tips that will help maintain your business, protect you and your assets throughout your growth process.

Protecting the the business owner is generally overlooked because we would rather pour our resources into building the company and generating revenue. But … what good is building a business if you don’t protect its creator to manifest the vision?

One basic, yet crucial, component to protecting yourself is through health insurance. You have to value your health in order to run a business. Your health is your wealth! You need to be healthy in order to be present, you need to be healthy in order to be productive, and you need to be healthy in order to be profitable.

Life insurance can also protect business owners. I suggest two life insurance policies, a “key man” policy which covers the business as the beneficiary and a term life policy which lists family members as beneficiaries. A key man policy is company paid life insurance on the key person(s) of the business, usually the owner(s) or executives that are crucial to business operations. If one of these people were to pass away, the business would get the insurance proceeds. The proceeds can be used to pay for company related expenses, assist in finding a replacement, or pay off company debts. It is not used to take care of your family.

A term life policy for 8 – 10 times the gross salary of a generally healthy business(wo)man would provide the necessary protection for your family. Remember, the goal is to protect. We are using insurance as a transference of risk, not an investment. The proceeds from a payout can be used to care for any children left behind or pay off your debts.

Lastly, entrepreneurs should invest in Directors and Officers insurance, often referred to as D&O insurance. It’s a professional liability insurance payable to the directors and officers of an organization (or the organization itself) as an advance on legal fees, regulatory compliance costs, or a reimbursement for losses due to a civil suit. It’s your wild card. It’s a protection most entrepreneurs aren’t familiar with. It cannot be used for losses incurred during intentional illegal activity, however.

By leveraging insurance, business owners can transfer risk and protect their family and legacy. How do you protect yourself while blazing your way to greatness?

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