1. Insurance Annie’s Project January 30, 2007 Coweta Oklahoma

2. What Is Insurance? • Protects you and your business from financial risk and losses. • Required by law and some lenders to have some types of insurance. • Can protect against: • Fire • Theft • Storm Damage • Vandalism

3. Life Insurance An Important Estate Planning Tool

4. Life Insurance Can Provide • Immediate cash for payments of debts • Costs of the last illness • Burial expenses • Costs of administration • Other settlement costs • Elimination of the possibility of a forced sale of assets

5. Life Insurance Can Provide • Funds for the surviving partner to buy the partnership interest from the deceased partner’s heirs • Enable the business to continue as an on-going enterprise • Many, many other situations that Life Insurance can assist

6. Designation of Beneficiaries • A life insurance policy is a legally binding contract which directs the distribution of assets to the beneficiaries. • Because family situations change frequently, it might be necessary to change the beneficiaries every so often.

7. Children an Beneficiaries • If the child is a minor, court may appoint someone to manage the funds until the child is of legal age. • If parents are not sure if the children are capable of managing the funds directly, assets can be left to a trust for the children.

8. Types of Life Insurance • Term Insurance: • Provides financial protection for a limited, specified period of time. • Does not generate a cash value. • Have a fixed annual payment for the specified period of time. • Whole Life: • Provide a death benefit for the entire life of the insured. • Provide a tax-deferred build up of cash values. • Can borrow against the current cash value of the policy. • Have a fixed annual payment for the life of the insured.

9. Types of Life Insurance • Universal Life Insurance • Flexible premium payments • Adjustable death benefit • Most have interest rates that are competitive with other investments • Must look at the administrative costs of the policies. • Variable Life Insurance • Death benefits and cash values fluctuate according to the experience of a separate account managed by the life insurance company. • Assume the added benefits and risks of the investment performance. • Must carefully review all policies.

10. Business Insurance Needs

11. Common Misunderstanding • Home and auto insurance will NOT automatically offer coverage for business-related accidents and losses. • People usually find out when it’s too late and discover that their homeowners coverage might be jeopardized.

12. Would You Be Protected? • You’re driving to buy parts. You hit another car, severely damaging both cars and injuring the other driver. • A customer trips over a tool left on the floor. • A power surge hits your computer and destroys the computer containing your client’s business records. • You hire a new employee. The employee is injured requiring hospitalization.

13. Types of Insurance Essential to Business • Insurance on the Structure and Contents • Liability Insurance • Automobile Insurance • Crime Insurance • Worker’s Compensation (for employees)

14. Structure and ContentsInsurance Suggestions • Might need a extended coverage rider for: • Windstorms • Hail • Smoke • Explosion • Vandalism • Loss of Business Records • Loss of Tools and Inventory

15. Structure and Contents Insurance Suggestions • Additional coverage might be needed for: • Computers • Fax Machine • Cell Phones • Other Special Equipment

16. Liability Coverage • Cover your business and yourself from damage or injury to customers, workers, or property. • As the owner and operator, you have more exposure to liability and property loss than when your house was used only as a residence. • Verify your current auto and homeowners policy to make sure it covers business pursuits.

17. Liability Insurance Suggestions • See if you current homeowner’s policy can be expanded to cover your business liability. • May need to purchase a general liability policy to cover: • Bodily Injury • Personal Property • Damage • Libel and Slander

18. Vehicle Insurance Suggestions • Consider adding a business use endorsement to your personal automobile policy. • Vehicle insurance may encompass both physical damage and liability coverage.

19. Worker’s Compensation • All employers are required to provide worker’s compensation insurance for their employees. • An employer who has five or fewer employees, all of whom are related by blood or marriage are exempt. • With the exception of agricultural employees who are not engaged in operation of motorized machines, all workers employed in agriculture or horticulture must be covered if their employer had a gross annual payroll in the prior calendar year of $100,000.00 or more

20. Determine Your Coverage • List the things that might adversely affect you. • Contact two or three insurance representatives for an evaluation and cost. • Cover your largest loss-exposure first. • Avoid duplication in insurance. • Take measures to reduce your risk: • Install sprinkler system, burglar alarms, etc.