Most business owners, officers and directors don’t realize that their personal assets are at risk for creditor claims in the event that something goes wrong with their business. A study has confirmed that three-out-of four Canadian small business owners have not taken adequate steps to protect their personal assets. Our financial advisors can provide advice on the easiest ways to protect personal assets: investments with insurance benefits.

TYPES OF LIABILITY

Business owners, officers and directors can be personally liable for:

• Any debts for which the business owner, officer or director has given a personal guarantee
• Any statutory debts such as wages and vacation pay (directors are personally liable for wages to a maximum 6 months wages for each employee owed)
• Any source deductions owed to the Canada Revenue Agency
• Goods and Services Tax and/or Provincial Sales Tax
• Health and safety violations
• Environmental damage
  

THE BENEFIT OF INSURANCE

Because certain investment products issued by Manulife Investments are regulated under the Insurance Act, they have the potential to protect personal assets from creditors in case of personal or professional liability, or a business failure. Creditor protection is one of the valuable benefits of investing through a life insurance company, and in 1996 the Supreme Court of Canada upheld the creditor protection afforded to insurance investments under provincial legislation.

This type of added protection is ideal for individuals who fit the following profile:

• Business owners of any size business
• Professionals such as accountants, chiropractors, doctors, dentists, etc. These professionals could be exposed to lawsuits against their practices
• Company directors exposed to financial risk on behalf of the companies they represent