Momentum - Business to Business Online Magazine | Page 28

The Case For Insurance In Buy/Sell Agreements By: Jan Laman, [email protected], Harbour Insurance Services, Inc If you own a business, there are many issues lurking behind the scenes many businessowners either ignore or simply dread having to deal with. Do you have a will for your business? Sole proprietorships, partnerships and small closed corporations all need to consider what happens if the owner or one of the partners or shareholders dies or becomes disabled. Questions such as who will purchase the company or the deceased partner’s or shareholder’s interest, what is a fair price, when should the sale be made and how the deceased owner’s/partner’s/shareholder’s families will be given a fair shake and taken care of are all real questions all businessowners need to properly and directly address before the event occurs. The business value will likely be devalued should a supplier or creditor perceive the death of an owner/ partner to be key to the success of the business. Key employees may consider the deceased owner/partners death as a reason to move elsewhere. There needs to be continuity and a smooth transition in the business when tragic events such as deaths or disabilities occur. The buy/sell agreement is important to resolve a lot of problems dealing with employees, creditors, suppliers and the deceased person’s fam