Business Insurance Services

Smart Options That Protect Today’s Businesses

Business Partnership Insurance

Businesses throughout Sherman Oaks, North Hollywood and Pasadena have discovered the benefits of business partnership insurance from Legacy Partners and Financial Services.
Business owners in Glendale, Van Nuys, Northridge and other surrounding communities have come to trust Legacy Partners to help them establish a solid succession plan, and a buy-sell agreement is an important part of that plan. At the core of your buy-sell agreement is Business Partnership Insurance. The fundamentals are fairly simple and explained with the following example:

Two equal partners run a business.

They collaborate in order to determine an agreed-upon value of the business. They then secure two separate life insurance policies on one another: each policy equal to half the value of the business. If one partner should pass away, the insurance policy proceeds are used to purchase the deceased partner’s share from his or her family. The surviving partner can continue to run the business, avoiding many of the complications associated with the loss of a business partner, and the deceased partner’s family could have a liquid asset that could be easily divided among heirs.
The professionals at Legacy Partners have the knowledge and practical experience to secure business partnership insurance at competitive prices. As an Independent Insurance Agency, we have many insurance providers with whom we’ve developed relationships, so you have options.

Business Overhead Insurance

Entrepreneurs are often the driving force behind a successful enterprise.  That’s why so many savvy business owners throughout North Hollywood, Van Nuys and Encino turn to Legacy Partners Insurance and Financial Services.  Businesses throughout Glendale, Pasadena and North Hollywood have protected their businesses with help from Legacy Partners.

Business Overhead Insurance is used to cover operational costs while you’re recovering.  This type of business policy generally covers payroll, rent, utilities and your taxes.  It can also be used to pay taxes, accounting expenses and/or legal fees incurred, as well as business insurance premiums, supplies and more.  These policies generally offer coverage for one to two years.  There is a waiting period between application submittal and the initiation of benefit payments known as an ‘elimination period’.  The length is predicated on policy details but usually falls between 30 and 90 days.

Buy/Sell Agreements

A buy/sell agreement is usually part of an estate planning strategy for small business partners.  One type of buy/sell agreement is known as a cross purchase plan.  This allows either partner in a business to purchase the other’s share of a business in the event of their death.  Here’s how it works:
The partners agree on the value of each share in the business.  A life insurance policy is purchased on one another with a benefit equal to the value of a business share. The surviving partner collects proceeds when the other partner dies.  This money is used to buy the share of the deceased partner, providing cash liquidity to his family members.  Another type of buy/sell agreement is known as a redemption agreement.  In this type of agreement, a company that is owned by multiple parties purchases life insurance on each respective owner and, like the cross purchase plan, proceeds are used to buy shares from the surviving family members.

Business Exit Planning

A buy-sell agreement is a fundamental component for establishing a business exit plan.  It provides departing owners with a market and price for assets that may otherwise be difficult to sell.  It allows remaining owners to prevent unqualified individuals from acquiring an interest in the business.  Buy-sell agreements reduce business disruptions that result from disagreements among owners.  It provides peace of mind to employees, customers, suppliers and creditors and helps owners use their business as a source of retirement income.