IPRG BLOG

In case you’ve been out of the loop, we’ve taken some time recently to talk about different coverages available to business owners.  Key Person Replacement Coverage, Business Overhead Expense Insurance, and DBO Insurance are three of our top recommendations to add security to your organization. 

What is Disability Buy-Out Insurance?

Most business have, or should have, a well planned buy-sell agreement with provisions for the future of the business.  One of these provisions should be an arrangement that if an owner becomes disabled and is unable to return to work, he or she will be required to sell his portion of the business to the remaining owners after a designated period of time. 

If your company doesn’t have these fundamentals in place, stop reading and get to work.  These agreements serve you best when the unexpected happens, so there is no time to delay. 

If you do have a buy-sell agreement with a Disability Buy-Out provision, Disability Buy-Out insurance is your next step.  Also known as DBO, Disability Buy-Out is not to be confused with Death Benefit Only.  In the event that the unimaginable happens and you find yourself faced with the task of navigating such a clause or funding a buy-out, this insurance will take effect. 

The primary purpose is Disability Buy-Out Insurance is to fund the buy-out, but there are several other benefits:

·      Alleviates the stress of dealing with the buy-out provision

·      Ensures the disabled owner will receive a fair price

·      Prevents the interruption of business

·      Safeguards against the sale of the business to an outsider

We really can’t imagine a reason why a business owner wouldn’t want peace of mind provided by Disability Buy-Out Insurance.  If you are ready to protect your investment, contact us today.

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IPRG BLOG