Business Financial Solutions

Business owners may sign surety for business debt at some point? What happens on their untimely death or get disabled before the debt is fully paid? The resultant financial impact of those decisions could have serious consequences on their family well-being.

Many business owners, therefore, have to sign surety on behalf of their businesses at some point. While this reality is something business owners have to live with, it is risky to sign surety without contingent liability insurance. At worst, it can place the personal estate of the business owner at the mercy of creditors, leaving little, if anything for his family to inherit.

Having contingent liability cover on the other hand ensures that creditors will be paid from the proceeds of the insurance payout. This type of cover usually takes the form of an insurance policy with life and disability cover. It is taken out on the life of the business owner for an amount equal to the debt for which the owner had stood surety. The policy is often ceded to the funding institution for security.