Is Your Business Really Protected—Or Do You Just Think It Is?
A few weeks ago, I sat across from a business owner who was visibly shaken. She was telling me about her friend Jane—not her real name—whose father had just suffered a massive stroke. One day he was running the family business as he had for decades. The next day, he was in the ICU, unable to speak or make decisions.
Jane had worked in the business for years, but she didn't know where her father kept the insurance policies. She didn't know which accounts paid which vendors. She didn't know the terms of the business loan or who had signing authority. And the buy-sell agreement they'd put in place fifteen years ago? It covered death, but said nothing about disability—and it was funded based on a valuation that was laughably outdated.
Between the personal trauma of watching her father fight for his life and the business chaos that followed, Jane found herself drowning. The business owner telling me this story kept saying, "It could have been me. I thought we had everything covered, but now I'm not so sure."
That conversation has stayed with me because it captures something I see with so many successful business owners: the dangerous gap between feeling protected and actually being protected.
The Year-End Question You're Probably Not Asking
As we head into the final stretch of 2025, you're likely doing what every good business leader does this time of year—reviewing financials, setting goals for 2026, maybe planning some well-earned time off. But here's a question that probably isn't on your list: If something happened to you tomorrow, would your business actually survive?
Not "do you have insurance?" or "do you have a plan?" Those are checkbox questions, and most successful owners can answer yes to both. The real question is: When was the last time you actually looked at that insurance or reviewed that plan?
According to recent research from VFO Inner Circle, while 58.7% of business owners have key person life insurance in place, a staggering 90.8% haven't reviewed their policies in the past three years. For buy-sell agreements, the numbers are even more sobering—only 14.8% of owners with these agreements have reviewed them recently, despite nearly 80% having them in place.
This isn't about whether you took action once. It's about whether that action still matches the business you're running today.
The Mindset Trap: "Done" Versus "Current"
Here's the mindset shift that matters: most of us treat business continuity planning like a one-time event instead of an ongoing relationship with risk.
You set up key person insurance five years ago when your company was worth $3 million. Check. Done. ✅
You and your partners signed a buy-sell agreement when you first went into business together. Check. Done. ✅
But here's what happened while you were busy building: your revenue doubled. Your top salesperson became absolutely critical to your success. Your company's valuation tripled. One partner got divorced. Another had a health scare. The market changed. Your team changed. Your vulnerabilities changed.
And that insurance policy and that buy-sell agreement? They stayed exactly the same, frozen in time, protecting a version of your business that no longer exists.
The dangerous part isn't that you don't have protection—it's that you think you do. That false sense of security is what caught Jane's family off guard. They had documents. They had policies. They just didn't have ones that matched their current reality.
What Actually Happens When Protection Fails
The VFO research includes a story that should make every business owner pause: A company's valuation rose significantly over time, largely due to the exceptional performance of one salesperson. When that salesperson died unexpectedly, the company discovered his key person insurance was drastically underfunded—no one had updated it as the business grew. They didn't have enough money to recruit and hire someone of similar caliber, so they had to pull funds from operations. The financial strain nearly sank the business.
The same thing happens with buy-sell agreements. A partnership agreement written when the business was worth $1 million doesn't hold up when the business is worth $10 million. When a triggering event happens—death, disability, divorce, disagreement—these outdated agreements create exactly the kind of chaos and legal battles they were meant to prevent.
And here's something most agreements don't address at all: disability. Death might be the traditional trigger, but disability is far more likely to happen during your business-owning years. If your agreement only covers death, you're leaving a massive gap in your protection.
This Isn't Just About Insurance
At Liberated Leaders, we talk about business continuity planning, not just key person insurance or buy-sell agreements. Those tools are important—even essential—but they're part of a larger strategic question: What happens to everything you've built if you can't show up tomorrow?
That question includes:
• Financial protection through properly funded insurance and agreements
• Operational resilience through documented systems and cross-trained teams
• Leadership continuity through developed successors who can step up
• Strategic clarity so your team knows what decisions to make without you
• Legal protection through current, comprehensive agreements
The insurance policies and legal agreements are the safety net, but they only work if they're sized correctly for the height you're currently climbing.
Your Year-End Audit—And Beyond
So as you're closing out 2025 and planning for 2026, add these questions to your list:
When was the last time I reviewed my key person insurance? If it's been more than two years—or if your business has grown significantly—it's time for an update.
When was the last time I reviewed my buy-sell agreement? If you can't remember, or if major life or business changes have happened since you signed it, it needs attention.
Does my protection actually match my current reality? Not the reality when you first put these things in place, but right now, with your current team, current valuation, current vulnerabilities.
Am I treating business continuity as a one-time checkbox or an ongoing strategic priority? Because that mindset shift—from done to current—is what separates businesses that weather unexpected storms from those that don't.
But here's the key: don't make 2025 the only year you ask these questions. Build this review into your annual operating rhythm. Put it on the calendar for Q4 every single year, right alongside your financial planning and goal-setting. Make it as routine as reviewing your P&L or planning your budget.
And if your business has grown to the point where you have key staff—a COO, a CFO, an operations leader—assign ownership of this annual review to someone on your team. Have them conduct the initial analysis, identify gaps or areas that need attention, and bring you a clear assessment of where you stand. This isn't about delegating something you don't want to think about; it's about building organizational capability and developing your leaders.
The Strategic Next Step: Building Value While Building Protection
Here's what I know from years of working with business owners: the hard part isn't understanding these tools exist. The hard part is making time to actually review and update them when you're busy running a successful business.
But you didn't build something valuable just to leave it vulnerable. You didn't work this hard to leave your family, your team, and your partners exposed to unnecessary risk. And you didn't create this business just to have it fall apart because of outdated paperwork.
When you build business continuity review into your annual rhythm, when you assign a leader to own this work and bring you strategic analysis, you're not just protecting what you've built—you're making your company more valuable.
Companies that can run without the owner are worth significantly more than companies that can't. Buyers and investors want to see documented systems, developed leadership, and clear succession planning. When someone on your team can walk you through your business continuity gaps and recommend solutions, that tells a powerful story about organizational maturity and leadership depth.
This annual review becomes part of your succession planning work—not the distant, someday kind of succession planning, but the kind that builds value every single year. You're developing leaders who can think strategically about risk. You're creating systems and processes that don't depend on institutional knowledge living only in your head. You're building the kind of organizational resilience that increases enterprise value.
So when you assign someone to conduct this year's business continuity audit, you're not just checking a compliance box. You're investing in leadership development. You're practicing the discipline of strategic thinking. And you're building the kind of business that can thrive whether you're there or not—which, ironically, makes it a business you can enjoy leading more fully while you are there.
If the conversation I had with that shaken business owner taught me anything, it's that we don't get to choose when these protections will be tested. We only get to choose whether they'll be ready when that day comes.
As you're planning for 2026, make business continuity part of that plan. Review your policies with someone who can tell you if they're still adequate. Dust off that buy-sell agreement and look at it with fresh eyes—or better yet, with the help of an expert who knows what gaps to look for.
This isn't about insurance companies or legal documents. It's about whether you're truly protecting what you've built, or just feeling like you have.
And that's a difference worth knowing before you need it.
Ready to ensure your business protection matches your current reality? Let's have a conversation about where you are, what you've built, and whether your continuity planning is keeping pace. Book a strategy session with me to talk through your specific situation—no checklist approach, just strategic thinking about what actually needs attention.
About the Author
Tina Dao is founder and principal of Liberated Leaders. She partners with business owners and decision-makers to ease the burden of company leadership and embrace the discipline needed to create long-term value. With COO and fractional COO experience, Tina is a Certified Exit Planning Advisor (CEPA), operations, strategy, and leadership development. Find out more about Tina on our About page.
Note: This article was 75% human generated and 25% machine (AI) generated.
Source Note: This article was inspired by research from VFO Inner Circle's report "Can Your Company Survive if You're Unable to Run It?" Statistics and examples cited are drawn from this source.