A business loan is a key part of starting or expanding a business. However, it’s important to make sure you have the right insurance in place to protect your business in case something goes wrong.
When you’re starting or running a business, it’s important to make sure that you have all your bases covered. One of the things you need to do is protect yourself from potential financial disaster.
Here are a few important things you need to know about business loan insurance:
1. It covers the cost of your loan if you can’t make payments
Sometimes business owners fail to make payments on their loan. If this happens, the bank or lender has the right to seize all of your assets in order to collect on the debt.
By taking out business loan insurance, you’re partially protected in case you are unable to pay back your loan because of one of the following:
- Death or Involuntary Unemployment
- Disability
- Long Term Illness
2. It guarantees peace of mind
You can get reimbursed for up to 80% of your lost revenue via business loan insurance if you’re unable to work because of an injury, illness, or death.
This is a good way to ensure you have the funds necessary to maintain your operations until you can get back on your feet.
3. It covers business-related costs
In many cases, business loan insurance also includes protection from business interruption and additional living expenses in case something happens that leaves you unable to work or reduces your earnings potential.
This means that if you’re unable to work due to injury, illness, or death, you’ll also be able to pay for some of your regular expenses.
It’s important to note that business loan insurance isn’t the same as medical insurance. While it can include some benefits related to health problems, it’s primarily designed to help protect your business from financial failure.
4. It’s only available under specific circumstances
Although it’s an option that some lenders offer, business loan insurance isn’t something you can get on your own. You’ll need to either work with a lender who offers the coverage or find one that is willing to provide you with a policy from another insurer.
5. The extra premium cost to your business loan is little
The cost to add business loan insurance to a specific loan will vary depending on the terms of the policy and who provides it. In most cases, you’ll be required to pay an additional fee in order to get the coverage. However, this added expense is minimal when compared with what you stand to lose if something happens that forces you to stop making payments on your loan.
Conclusion
Borrowers who don’t have access to traditional forms of business financing or personal savings may rely on getting a business loan in order to get the money they need for their startup or expansion project.
However, it’s important that you make sure you have coverage in place in case something goes wrong and you’re unable to make your payments.
By getting a policy from a loan broker business that can cover the lost revenue from a business loan, you’ll be able to protect yourself from financial disaster and make peace of mind one less thing you have to worry about.
