BUSINESS CONTINUATION INSURANCE

Life insurance that a company or firm purchases to provide the funds necessary to continue business and cover the losses incurred in the event of the untimely death or disablement of someone critical to the business. This may be an owner, partner, or other employee without whom the business may cease to operate.

The two most common types of business continuation insurance policies are entity purchases and cross purchases. Entity purchase policies involve the business itself being named as the owner and beneficiary of the insurance policy. Cross purchase policies mean that the individual owners of the business are named the beneficiaries for policies that cover their partners and/or co-owners.