Which of the following statements about disability risk in partnerships is most accurate?

• A. It is greater than the risk of death.
• B. It is less than the risk of death.
• C. It is equal to the risk of death.
• D. It cannot be compared.

Answer: (A)

In partnership risk planning, the likelihood of a partner becoming disabled and unable to work for an extended period is often higher than the likelihood of death within a similar time frame. This matters because disability can strike while a partner is alive and active, potentially lasting long enough to disrupt daily operations, decision-making, and cash flow. In small partnerships, that disruption can be severe since there may be limited contingencies or backup talent, making disability a dominant risk to continuity and finances. That’s why the statement that disability risk is greater than the risk of death is the most accurate.

Think of it in terms of business continuity: loss of a partner to disability can create a longer, more unpredictable gap in leadership and contributions than death, which, while final, is a one-time event and often more predictable in planning assumptions. This perspective explains why disability insurance and disability-related buy-sell provisions are emphasized in partnership agreements. The other options miss this practical planning emphasis or assume an equality or impossibility of comparison that doesn’t fit how these risks are managed in real-world partnerships.