JANUARY 25, 2010

You put a lot of thought into your business – marketing plans, sales goals, social media strategy, finances and a strong will. But what if you are disabled? Do you have the right coverage for that?

"I ask business owners how they plan keep the lights on at the office if they don't show up tomorrow, and they look at me like I'm crazy. They're always there," says Janie Schiltz, vice president of small business markets for Northwestern Mutual. "'But,' I ask, 'What if you were bed-ridden for six months?' Silence." And women have a 70 percent higher risk for disability then men, according to the Society of Actuaries.

As a business owner, you have two entities to protect – yourself and your business – so you need insurance for each, says Schiltz: disability income protection to keep your household running and business disability insurance to keep your company operating.

Here are some options:

Buyout policies, usually only paid out if the person has become 100 percent disabled, provide a lump sum of cash to allow you to buy out your partner (should be part of your buy/sell agreement).

A key-person disability policy can be taken out on a company's owner or any critical employee who drives the revenue of the business. It covers some losses and recruiting costs while a replacement is found.

Disability overhead expenses insurance will literally keep the lights on should something happen to you. It pays your operating cost for a limited time (i.e., rent, utilities, salaries, etc.).

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