Business assurance is a form of protection a business can take out to protect it from potential dire financial consequences should some person that is critical to the contingency of the business die or become disabled. The purpose of business assurance is to ensure that a business remains a going concern after an unplanned event.

Key Man Assurance

Key Person Assurance is essentially a policy taken out by the business and paid for by the business on the life of a key person. If the key person were to die or become disabled the policy will pay a lump sum to the business. These funds can then be used to finance the business during the time that a replacement for the key person is found or trained.

Buy and Sell Insurance and agreements

In the event of the death or disability of a Partner or Shareholder, it is vital that provision be made for the sale of the deceased's interest in the business and that sufficient finances are available to the survivors to purchase the deceased's interest. In so doing, each partner is guaranteed that on his death, his estate will receive a fixed and determined amount for his share of the business. A Business Buy and Sell policy is the ideal tool for this situation

Usually the proceeds of a policy forms part of the estate of the insured. Key Person and Buy and Sell policies however do not form part of the deceased's estate and thus the estate does not have to pay any taxes on this payout. There are however some technical rules that must be adhered to for these policies to be treated as such and if these conditions are not met the policy will be taxed in the deceased's estate causing unnecessary expenses. It is therefore imperative to work with a DSA Advisor to ensure that Business Assurance policies are structured correctly with no impact on the deceased's estate.

The majority of businesses today are exposed to risk with relation to people who manage their enterprises. If an enterprise or individual is not adequately protected against the disability or death of its managers it will face various risks. We therefore offer advice and guidance on how business assurance can cover the risk that its people pose.