MDNews - San Antonio

+++++++++++++++++++++++++ + + +++++++++++++++++++++++++ RISK MANAGEMENT +++ +++ Planning for the Unexpected By Nick Grant P LANNING FOR THE unexpected is a necessary part of any risk-management strategy for business. You plan for accidents in the workplace, legal risks, fraud and theft, uncertainty in the market, and potential data security and storage issues. But do you have a plan in place to provide security should a key person in your organization become seriously ill or die? The death of a senior member of your team is something that no one wants to think about; however, it does happen, and you must be prepared. How would your medical practice or business fare — in terms of sales, revenue, productivity, etc. — in the months following an important team member's passing? Whether you're a small, mom-and-pop shop or a large, enterprise organization, you are sure to have key personnel essential to keeping your operations up and running. Losing someone who is an integral part of your team can be over- whelming and cause a sense of operational instability. This can also cause a feeling of nervousness outside of your opera- tions, resulting in loans being called, clients looking elsewhere, credit sources drying up and your competitors gaining an upper hand. It's important to think about how the loss of a key person in your office might impact business operations. Not only are there the emotional effects of losing someone close to you, but the loss can also potentially impact your bottom line. You can make sure your business or practice is protected by insuring key office personnel through a life and/or disability policy that lists the business as a beneficiary in the event of death or disability. This can provide your business or practice with a safety net of financial support, and it may also allow for growth by putting your company in a better position when applying for loans. As a component to business life insur- ance, businesses are able to purchase life and disability policies on key employees to cover the amount of funding that may be needed to adequately continue operations in their absence. In most cases, this is a relatively inexpensive policy, considering the peace of mind and potential benefits it could provide. For example, a 10-year, $500,000 policy can be as inexpensive as $29/month*. The business or practice is the owner of the policy and is responsible for paying the premiums and acting as the beneficiary should the employee become disabled or pass away. A good rule of thumb in determining coverage amounts is to calculate what the individual's salary would be for five years. Should that individual die or become disabled and unable to work, the benefits paid can be applied to any number of things, including buying back shares of a partnership, covering the expenses of finding, recruiting and training a replace- ment employee, and helping with general expenses while your business or practice figures out next steps. Key-person policies are designed to protect your practice or business in the event of an unforeseen loss in personnel. You spend your time taking care of your clients. Make sure you're taken care of as well. Nick Grant is the Chief Executive Officer of SWBC Insurance Services. He can be reached at (210) 525-1242 or swbcinfo@ swbc.com. ■ *Rate quoted is for a 45-year-old, preferred-plus, non-tobacco-using female. 10 | San Antonio MD NEWS ■ MDNEWS.COM

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