Freight Companies – Transportation at Discounted Rates

Small businesses need help when dealing with freight companies. They need the process to be simplified so that they can deliver their products with speed and efficiency. To cater to this demand some service providers have entered the market that makes the task of freight services easy for their clients. Clients have different needs when it comes to the volume of goods that they are transporting. Some clients require a single pallet. Others need to transport multiple LTL shipments. They need to get quotes from leading agencies that will tell them exactly how much they have to pay to obtain these services.

There are many small businesses that work on a limited budget. They cannot afford to spend a lot of money on their transportation costs. However, they would like to take advantage of quality shipping services. That is why they try to get the benefit of discounted freight quotes. They can take advantage of pricing options that ensure service, capacity and timing that meet all their requirements. A customized freight solution would be given for each shipment. Small businesses should take the help of service providers who have the negotiating capability to get discounted services from thousands of nationwide transportation companies. Small businesses find that reputed service providers handle the entire shipping process. They find the best carrier, arrange the pickup, create the Bill of Lading as well as the shipping labels and track the shipment every step of the way. All this is done at an affordable cost.

Freight companies give discounts based on shipping volume. Small businesses often do not have large volumes to transport. But the service providers who negotiate the rates pass the discounts on large volumes to the small firms as well. They even get assistance with variables such as freight classifications, packaging recommendations, transit time, modes of transport, and documentation. Another benefit that customers can get is LTL shipping. This is a method where the cargo of the client shares a truck along with the cargo of other clients. The cargo is moved on and off the truck as and when the cargo from other sources is offloaded. Even though this route is not direct it can often be the most economical method of transportation. It is a little bit like how passengers change the buses to get to a particular destination. Even though the cargo shares a container freight companies guarantee that the shipment will arrive safely and at a fraction of the cost of other methods.

Service providers offer a few tips on the best way to get this process done smoothly. One should ideally grab a pallet as quickly as possible. The goods should be placed safely and securely. Shrink wrap and other packaging materials should be used prudently. The small business should give the service provider all the details of the weight, dimensions, pickup and delivery information. Once the driver arrives the Bill of Lading should be handed over to him. Taking the help of good service providers can help clients get the best rates from freight companies.

Defeating Your Speeding Ticket

So it eventually happened – you got a traffic ticket?! What should you do next? Many people believe that the best thing they can do in this situation is to humbly accept their fault and silently pay the fee. This self-humiliation is not only incorrect as many traffic tickets get routinely defeated in traffic court – it could be very harmful for your driving record and specifically for your rising auto insurance premiums. Never forget – you are not guilty until proven guilty in the court of law. Know your rights and most importantly – know how to defend them in the court.

Below are the tips and hints designed to help you to get knowledgeable and defeat your traffic ticket in court if needed.

1. Be Nice and Polite with Traffic Authorities

Never argue with the police officer at the time of the traffic stop; stay polite and keep a low profile. And this is not just a requirement of general politeness – keep in mind that there will be cross examination of the police officer in court. The court session usually happens many weeks from the date the ticket was issued to you. Fewer memories you leave to police officer about yourself and speeding accident itself the more difficult it will be to police officer to win his case in the traffic court.

Also don’t ever try to tell the law enforcement official that you were speeding because you were in hurry – reasons vary from urge to the rest room to your medication time to your kids waiting after school in front of the locked door – you name it. This simply doesn’t work!

2. Duration of Consistent Speeding

As an instant speed increase is not a speeding violation per se – not every speed increase results in a speeding citation. According to working definition of speeding you have to be driving consistently over the speed limit and presenting a danger/hazard for other drivers/pedestrians on the road.

In other words – speeding in the middle of the desert with you being the only driver in the road would unlikely spell any ticket trouble for you.

“Well, what does it mean for me practically?” you might ask. This means that one single measurement with a car speed over the speed limit is not enough – the police officer must present a series of measurement shots of your car proving that you were speeding consistently. If the police officer fails to present this evidence – your speeding ticket is dismissed.

3. Speeding Measurement Uncertainty Interval

Speeding with less than 6 miles over the limit usually gets ignored by court as it lays within the error zone of speed measurement devices. Many traffic police officers know this fact and will not stop such “speeding” vehicles as it is impossible to prove the speeding case in the court.

If your traffic police officer is a newbie and is not aware of this rule – bring your case to the court – you will easily win.

4. Traffic Officer’s Speed Measurement Device Certification

Whether your alleged “speeding violation” was captured by a laser, a radar, a police car speedometer, an aircraft or some other measurement device that device by law must undergo a periodic bench testing and certification program (usually at least once in 6 months) and be up-to-date at the moment of issuing a speeding ticket. If that measurement device was overdue in a re-certification test – your speeding ticket will be happily dismissed even if you were driving 200 miles in 10 miles zone.

5. Modifications You Made to Your Vehicle

Did you modify your vehicle with oversized wheels or tires? This “innocent” modification would negatively affect the accuracy of you your speedometer. The tire’s outer circumference is an important parameter in speed calculation algorithm used by car’s speedometer. Larger tires would show lesser speed in your speedometer, so you might be speeding without even being aware of it. Just get your speedometer corrected and re-calibrated and show the proof of it to the court – your speeding ticket will be dismissed.

6. Vehicles Around You at the Time of Speeding Event

The traffic police officer must prove to court that his speeding measurements can be attributed beyond-the-reasonable doubt to your vehicle, not to other vehicles around you. But what if a large truck was right behind or in front of you and the laser beam reflected back from that truck rather than from your car? Can the police officer undoubtedly prove it? If not – your ticket is dismissed.

7. Emergency on the Road

Trucks with an emergency siren at the time of speeding event, erratic driving by other cars around you, your honest attempt to avoid a possible fender-bender accident from other cars, severe weather or road condition and many other road-related factors can affect your speeding ticket admissibility to the court. This very subtle and rather blur traffic defense resource usually requires the help of a knowledgeable professional lawyer specializing on traffic ticket defense.

8. Construction Zone

You will be surprised but things in construction zone go differently than in normal roads. It is a twilight zone of traffic law. You would need help of a professional here if you bet on that factor.

9. Never Give Up

Never forget – you are not guilty until proven guilty in the court of law. Even if you are convinced that your case is totally lost and there is no way you can win the case – still go to court and defend yourself – you can cut your fine at least in half in most cases. You will also be surprised to discover that about 40% of all traffic tickets were happily dismissed simply because a traffic officer didn’t appear in a court. So, there is always a chance to win.

Conclusion

Never underestimate the importance and role of a professional legal support in your traffic ticket defense. Note the above discussed tips are firstly for informational purposes. They are not meant and cannot replace professional help of an experienced traffic lawyer. Many tickets can be dismissed with proper help. So, help yourself and defeat the ticket!

Driving Under the Influence for Minors in Texas

As driving schools throughout Texas are doing their best to highlight; the Lone Star State does have issues with drunk driving. For the past several years, Texas has led the country in drunken driving fatalities. Texas is also the only state in the country to consistently clear 1,000 fatalities (1,235 in 2009, 1,258 in 2010, and 1270 in 2011). These statistics aren’t even including alcohol related injury and property damage, which are numbers that climb even higher.

The truth that must be confronted is that Texas has a clear problem with intoxication and driving. Driving schools continue to teach and inform the gravity of the ever increasing drunk driving penalties. Good habits begin in driving school and stretch into the future, as roughly 15% of drunken driving fatalities are due to the impairment of a driver under 21 years old (the legal drinking limit). Harsher laws have been developed in an attempt to curb the increasing mortalities; laws that can severely debilitate a young driver’s financial and driving independence. The following is a rundown of some of the underage drinking and driving laws in Texas, and how those laws can make things harder for a minor who runs the risk and is caught.

Zero Tolerance
Firstly, Texas is a Zero Tolerance state. This means that if a minor who is pulled over under suspicion is found to have ANY DETECTABLE amount of alcohol in their system, they have immediately committed a DUIA (Driving Under the Influence of Alcohol) crime; even if their BAC is under the legal limit. As a minor, they should have no contact with alcohol to begin with, thus driving while drinking any amount is that much more serious.

The Test
When pulled over, the minor will be asked to submit to a breathalyzer test to check their BAC. Once again, if any BAC level is blown, the minor will be charged. However, refusing the test could be much worse. Refusing the breathalyzer, blood test, or field sobriety test will result in IMMEDIATE license suspension for a minimum of 120 days, with suspension increasing for a second and third offense. On top of the suspension, the minor can be placed in jail and held until bond is made or they appear before a magistrate of Juvenile Court.

The DUIA
The penalties themselves are very much reliant on oh the judge’s discretion, though there are definite benchmarks of minimum and maximum. The givens laws for DUIA offenses are:

1st Offense DUIA – Class C misdemeanor with up to a $500.00 fine and between 20-40 hours community service. Driver’s license can be suspended for up to a full year, and completion of an Alcohol Awareness Course at driving school is required. If the minor is under 18, their parent may be required to take the course as well.

2nd Offense DUIA – Class C misdemeanor with up to a $500.00 fine and between 40-60 hours community service. License suspension for up to a full year as well as the Alcohol Awareness Course is required.

3rd Offense DUIA – If the driver is under 17, the DUIA is filed as “Delinquent Conduct.” Punishment is up to a $500.00 fine and between 40-60 hours community service. License will be suspended until the minor is 19 years or older

– If the minor is 17 years or older, the DUIA is a class B misdemeanor that carries a fine of at least $500.00 up to $2,000.00, 40-60 hours community service, and up to 180 days in jail.

The trouble simply is not worth the risk. Thousands of adults and children meet their end each year due to a preventable drunken driving accident. These laws are in place to deter and prevent fatalities so that we can begin to chip away at these regrettable statistics. For more information, contact your local driving school. And remember, Zero Tolerance.

The Convenience of Selling Cars Online

The Internet has made buying and selling cars so much more convenient. In the past, selling a used car meant classified ads, your social circle or a sign on the car’s rear screen.

A large number of online sites offer facilities to sell cars online for free. An increasing number of people consider such sites an excellent choice, one they would recommend to everyone.

Classified ads allow customers very little space to provide information about their cars. With a rapid decrease in newspaper readership, a classified ad is likely to have limited audience.

Online seller, on the other hand, have all essential space you need for appropriate details, including the car’s condition, repairs and issues, and any additional features that would make it attractive for buyers. Remember that buyers also want to know the make and model, mileage, and driving history. Don’t forget to add your contact information and asking price.

Online car selling sites also provide options for adding photographs of your car’s interior and exterior. Keep in mind that your car will look better after it has been washed and polished. Take a number of photographs for each angle and then choose the best ones.

Make sure that your car’s documentation is properly updated.

If your description is detailed and accurate, you are likely to find the appropriate buyer without difficulty and in lesser time. Buyers are very well-informed and most often know exactly what they are looking for. If your portrayal fulfills a buyer’s expectations, you could have an offer soon.

Since a majority of prospective buyers can narrow down their search by price, model or make through an online search, the response time can get remarkably reduced. If your car is a popular brand or model, you will find one very easily.

Another benefit of selling your car online is that the cost gets cut down. Classified ads are expensive, and you might have to continually publish the ad a number of times, before you are able to successfully find a buyer. On the other hand, online sites for buying and selling cars charge very nominally and many times, nothing at all.

You must start looking where to sell your car online; research all options. Look for sites that are offer the facility to list your car to sell. Explore the site to see if it is user-friendly and how soon you can reach your ad. You could choose a big company with large online traffic that surfaces higher in a web engine search, because that increases the chance that potential buyers will find it too.

Another option could be to choose a local site which may have fewer visitors but your car will have fewer competitors.

Since there is large option of online car sellers, choose one that places your ad at no cost. Although a minor saving but that could be the reason buyers prefer it too, since they would not have to pay a fee for using their services either.

Driving License Tests – Choosing the Best Online Training Provider

With the large number of online training resources offering a driver license training from the comfort of your home, choosing the right training provider becomes very obscure and a rather difficult task. For the inexperienced learner many driver license tests available online might look equal. However with a closer look you will see that some tests are “more equal than others”.

The check list below will navigate you through the maze of options to get you the right online training.

1. Are Offered Online Tests the “Text-Only” Ones? People are very visual creatures. Adequate graphics helps us to learn better and quicker. Online tests without accompanying graphical illustration of each question look pretty outdated and won’t help in quality online training.

2. Is Online Driving Test a Static or Dynamic? Many driver license permit tests found in the Internet are the “hardwired” static samples of 2-3 standard test sets. This type of online tests is not meant for serious training and is simply a start point to give you the main idea of what kind of questions could be asked in DMV test. Modern advanced online drivers permit training systems are all dynamic. For such training systems each specific test is a custom-generated dynamic set of questions which gets its feed from a large pool of test questions and answers in the database. In well designed online training system the questions and answers are usually randomly hashed to create a unique and unparalleled learning experience.

3. How Many Different Test Sets Can You Get in Your Online Training? Check how many unique, non-repeating tests could be offered by online system. The larger the number of unique tests – the higher your chance to learn the material better and to pass your DMV test from the very first attempt. For online training systems this usually translates into the size of a pool of questions-and-answers included into the provider’s online database. Make sure that this training pool has at least 150 – 200 questions.

4. Can You Request Tests with Incrementally Growing Complexity? The Questions in the tests you take are of different complexity. To insure the better learning curve for you it is important to take specific tests in form of training packages of incrementally growing complexity. Best advanced online driver training systems should offer you a carefully designed line of training packages of incrementally growing complexity to accelerate your learning. Start simple and go higher and deeper with your training while your knowledge grows.

5. Is the Test Progress Indicator Shown During Your Test Session? It is a good practice (and some would even say – a standard) to show how many questions you have already answered and how many still has to be answered to complete the test. All advanced training systems have this indicator. Some advanced online drivers license training channels will even include the time left and time elapsed since you started the test.

6. Can You Choose the Language of Driver License Tests? We are a nation of immigrants. If you are not a native English speaker getting training in your first language could be crucial for your success. In addition to that, taking your DMV test in English is not mandatory in the U.S. – many states have a list of approved alternative languages and officially allow you to take a written DMV test in the language other than English. Make sure that your online drivers training provider supports multiple languages.

7. Are Offered Online Driving Tests Customizable to Your State of Residence? Driving tests in the U.S. significantly vary from state to state in test size, structure and complexity. For example, in Washington State the driver license permit tests are made of 25 questions in total (21 traffic law and 4 road signs questions) and you would need to score at least 20 correct answers to pass the test. In Indiana State each DMV test includes 50 questions in total – 34 traffic law and 16 road sign questions – and is actually a two tests in one. You have to correctly answer at least 28 traffic law and at least 14 road sign questions to pass your DMV test. Another difference in DMV tests offered by different states is the number of choices they use for each multi-choice question. Some States use 3 answer choices for each question in their tests while others can use 4 or even 5. The more multi-choice answer options displayed for each question – the more difficult it is to pass the test. It is understandable now that the same driver license student who easily passes the DMV test in one state can well fail in another state. By adjusting the driver license training tests to your State of residence you will get the knowledge tests of corresponding size and structure which eventually will help you to get better prepared and pass your DMV test from the very first attempt.

8. Does Your Training Channel Provide You a Test Performance Report? Knowing what questions and in what question category you have answered incorrectly helps to expose the weak points in your knowledge and hence – define the next steps in your training effort. This usually gets addressed by real-time performance reports generated every time you finish your online driver training test.

9. Can You Re-Take Exactly the Same Test Again if Needed? If you didn’t do well in your last training session you might want to re-take the very same test again to better understand questions which you didn’t answer well. So it is important to be able to re-take the very same test again. Some advanced online driver permit training systems even allow you to get back and re-take only the failed part of your test skipping the questions which you answered well. Focusing only on questions where you are not doing well yet will save your valuable time and provide a solid and smooth learning experience.

Conclusion

Choosing an online driver license training provider is a non trivial task which directly affects how quickly you will learn and hence – how soon you will start driving. Don’t ignore this important step – make sure to invest some time in your online training provider selection. This will certainly pay you off down-the-road by saving you a lot of time in training as well as save you money by eliminating unneeded DMV exam fees for re-taking the failed test.

How to Get the Best Personal Insurance Quotes?

No matter what kind of insurance you need, getting good insurance quotes is the first step to ensure you have the right coverage and that you are not over paying. You can either actively or passively find insurance quotes. You can get passive insurance quotes by opening a cellphone contract and applying for a house, car or personal loan and waiting for unsolicited phone calls. This reactive way of getting quotes will only waste about half an hour each time someone calls to promise the lowest rate. Unfortunately, this may or may not result in lower premiums or better cover. On the other hand, actively finding insurance quotes will ensure you do it right the first time, here’s what you need to know.

Only buy what you need

There are many types of personal insurance coverage you can buy, such as car insurance, home contents or life insurance to name just a few. Before you are able to get an accurate insurance quote, you should determine what you need and assess the value of the coverage you require. Take a look at the different policies and identify the coverage that is suitable for you. Ask yourself, is there something I don’t need? Or do I feel comfortable paying a large excess out of my pocket?

Use a calculator

Once you have established the coverage required, the best way to start your insurance quote search is to use an online calculator. These are not completely accurate but by plugging in the basics you can get a rough idea of the costs involved. In addition, if you are passively searching for insurance quotes some calculators will link your details to a database for, yes you guessed it, unsolicited phone calls.

Do the research

Now that you have an idea of what insurance should be costing you each month, it’s time to get insurance quotes from providers. This can be done in several ways. The yellow pages list many insurers and the internet has numerous insurance directories. Online insurance quote engines have become a popular choice, especially those linked to multiple insurance companies. It is quick and easy because you enter your information once to get multiple quotes.

Alternatively, speak to a broker. Many broker companies focus on full financial planning, offering investments, stocks, insurance, trusts, will & testaments, and related products. The advantage of having everything under one roof is you can easily keep tabs on your portfolio of financial products. In addition, a trusted broker will look after your interests and ensure you get the good advice and coverage at the best price.

Understand the policy before you sign

By their nature insurance policies are designed to prevent abuse and fraud. Therefore it is important to understand your rights and responsibilities as the policy holder. You also have an obligation to question things you don’t understand and change clauses you are not satisfied with.

PSG Online insurance offers a range of short term and long term insurance products from different insurance companies to suit your insurance needs.

The Role of Insurance Companies in Personal Insurance Lawsuits

Personal injury lawsuits are normally contentious issues. Sometimes they are clear in terms of negligence and responsibility, but that is not always the case. Tort cases are actions between primary parties. In most cases the defendant, which is called the respondent in a tort claim, will have a common insurance carrier depending on the facts of the case. In some cases the petitioner has insurance coverage also, so the material facts of the case can be confusing.

EVALUATION OF COVERAGE

The first role of the insurance company in a possible negligence case is to assess the parameters of coverage. This can be problematic if the company has a responsibility caveat. Insurance policies are always subject to scrutiny in terms of coverage. And insurance companies have those stipulations in place for this reason. If they can reasonably avoid compensating the injured party, then rest assured that they will.

The first meeting with the insurance company will be with the adjuster. Settling the case as cheaply as possible is the adjuster’s goal. Assessing the injuries before hand in terms of damages is always a good practice for the injured party. This will help the victim not undersell. The adjuster is also concerned with a quick settlement if the petitioner will settle for a minimal amount. Patience is clearly an advantage at this stage of a potential court claim.

EVALUATION OF EVIDENCE

The insurance company will then evaluate the merits of the case. There should be copies of all medical records on file, including diagnosis and status of the injury. A prognosis is always important also because it can establish the inevitability of future medical problems resulting from the injury. Very often the insurance company will want to avoid any future claims and a validation of coverage liability can be limited to the cap of the policy.

It is important to understand that the insurance company’s involvement in the matter stops at the point that they pay the maximum on the policy. Any additional claims will need to be pursued against the primary respondent in the event that negligence is established. The fact that an insurance company will pay a claim before court does not preclude a court decision in the respondent’s favor. The insurance carrier should not longer be involved or have a recourse.

REPRESENTATION

When a case goes to court the insurance company will be represented well with professional counsel. The victim should do the same, preferably with solid experienced legal counsel. When cases actually go to trial the parties both need effective counsel to determine both compensatory and punitive damages, as well as establish materials facts and merits of the litigation. A reputable personal injury lawyer is always essential in negligence cases that actually move to court.

Buy Personal Insurance to Get Protection Against Financial Losses

It is not only important to purchase insurance policies, but also necessary to buy adequate coverage so that you and your family members are protected from unforeseen circumstances. If you’re the bread earner of your family, then it’s your responsibility to afford the right medical treatment for your family members or to ensure that they don’t experience financial crunch in your absence. Read this article to know about different types of insurance policies that will provide you with the required coverage.

Personal insurance policies that you should purchase

4 Types of personal insurance policies are discussed below.

1. Health insurance – Purchasing adequate health insurance coverage will help you to afford the right medical treatment even it is expensive. Medical costs are rising day by day; so, consult with an insurance agent and purchase right amount of coverage for you and the other members of your family.

2. Life insurance – This policy pays cash benefits to the beneficiary/beneficiaries in the event of the policyholder’s death. So, by purchasing this policy, you can ensure that your family members can continue their present lifestyle and stay in the home as they can pay off the outstanding mortgage balance along with other debts with the policy proceeds.

3. Car insurance – A car insurance policy provides compensation for the loss when your car gets damaged in an accident. In addition, the policy also covers liability claims when your car is responsible for someone’s injury or the vehicle causes damage to any property.

4. Homeowners insurance – You make a huge financial investment when your purchase a home. So, you should buy homeowners insurance policy in order to get coverage against theft or damage. You can also cover your expensive items through a home insurance policy.

Apart from purchasing the types of insurance policies discussed above, you can also buy travel insurance when you go for a vacation. This policy will cover certain financial losses that may incur during your trip, such as, a travel delay, a trip cancellation, loss of baggage, etc. In addition to this, this policy will also cover medical expenses if you suddenly fall sick on your tour.

You can purchase sub insurance policies along with the basic types of insurance policies. The primary purpose of purchasing sub insurance is to get additional coverage. For example, an insurance floater (a sub insurance policy) may offer additional coverage to easily movable properties, such as, an expensive piece of jewelry. You can also get an insurance rider for covering critical illness which may not be listed in your health insurance policy.

Personal Insurance Reviews Benefit The Customer and Agent

A personal insurance review is simply reviewing your insurance policies with your agent. This can be done by phone or in person. I feel it is always nice to do these in person. Meeting in person makes the review more personal and builds rapport with your agent. I recommend completing a personal insurance review every one to two years. There are several benefits to having a regular insurance review.

One benefit is that you may uncover discounts that you are eligible to receive. Insurance companies offer a variety of discounts to their policyholders, so you want to see that you are receiving all discounts available to you. One example of a discount that may be overlooked is the Good Student Discount. Most companies offer this discount, but the agent may not be aware that a child qualifies for the discount until an insurance review is done. Updating the electrical, heating, or plumbing on your home may provide you a discount on your home insurance; but your agent may not know that these updates have been done to your home until you have an insurance review. Personal insurance reviews are a great opportunity for you to discuss all discounts available with your agent.

A second benefit is to review the coverage on existing policies. Your situation may have changed since the policy was written and you may not need the same coverage as you did previously. One common situation is people that have vehicles on their policies for several years. Sometimes these vehicles still have full coverage, but the customer does not realize it. The age or condition of the vehicle may not warrant the additional premium for full coverage. Another common situation is people that still have very low deductibles on their home insurance. It was not uncommon to have $50, $100, or $250 deductible 15 to 20 years ago, but many times there is a significant savings in premium to raise the deductible. A personal insurance review is a great time to remove any coverage that may no longer be needed.

A third benefit is to locate any gaps in coverage. There are many areas where gaps can occur in your insurance program without you realizing it. Your life changes frequently and many of the changes may seem minor, but can have an effect on your insurance coverage. Some common changes that affect your insurance are updating a home can increase its value; having children may increase the need for life insurance; purchasing an expensive television or jewelry may require additional endorsements be added to your home insurance. Having an annual or bi-annual review helps to uncover areas where gaps in coverage may exist.

People are often hesitant to have an insurance review because they feel the sole purpose is for the agent to sell more insurance. However, the purpose of the insurance review is to make sure that the individual has the proper coverage in place for their situation. This is a benefit to the agent and the customer. The customer benefits by gaining a knowledge of their coverage and receiving the peace of mind that they are properly insured. The agent benefits by knowing their customers will have no gaps in coverage if a loss occurs.

It is important to have regular insurance reviews with your agent. The reviews make sure proper coverage is in place before a loss occurs and that you are paying the proper premium by taking full advantage of all discounts available.

Key Person Insurance

Business owners seldom think twice about the need for insuring the physical assets of their business, but often overlook or struggle with the concept of insuring their key personnel. Key personnel could be defined as;
o Someone with specialised skills or knowledge in your business
o The founder or public face of the company
o The creator of unique intellectual property – software, key adviser, major account/sales person
o Someone with responsibility for a significant portion of revenue/profit

The death or disablement of a key person can affect a business in a number of ways:
o Lost profits otherwise generated by the key person
o Additional costs to secure and integrate a replacement
o Loss of contracts and customers
o Loss of market share as competitors “fill the void”
o Ability to stay solvent, potentially breaching The Company’s Act
o Ongoing stress for the remaining proprietors/staff
o Loss of company value

Key Person cover is designed to inject cash into the business to provide funds to secure a replacement, replace or reduce lost profits, reassure customers and creditors that the business is financially secure and to meet contractual obligations. Without Key person cover the business may be forced to wind up or face a significant reduction in its value. Statistics tell us that;

o 1 in 5 businesses have to be wound up or cashed up if there is an event which affects a key employee.
o In a forced sale business assets realise approximately 35% of the owner’s perceived value.

Debt cover may have been effected on the life of the key person by the business, once a claim has been made and debts repaid this may make funds previously used to service debt available to meet key person needs that may have arisen.

As any sole trader will be the key person in their business, their death or disability invariably means the business will not continue. In the event of premature death it would be important to ensure sufficient funds were available to compensate dependants who needed it and in the event of a disability, income protection would be important to secure a replacement cash flow.

Key person policies are normally owned by and paid for by the company. The generally accepted view for limited companies is that the premium is tax deductible and the benefit is assessable. However, if all funds are used within the tax year of receivables for deductible expenses, no tax is payable. Each company must seek advice from their tax adviser on their specific circumstances.

Written by Gerard Tilleyshort