Business Protection

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What is Business Protection?

Business Protection insurance is an umbrella term for a variety of insurances. They are all designed to help financially protect a business when its owners, employees or key people are affected by illness or death.

The key types of Business Protection insurance we offer advise on:

Key Person Insurance: A key person is an individual whose skill, knowledge, experience or leadership contributes to the continued financial success of the business. This insurance is therefore designed to protect a business against the loss of profits if a key person within that business dies or becomes terminally or critically ill. The proceeds of the policy can be used by the affected business to find a replacement and help maintain the profitability of the business.

Shareholder Protection: can allow business owners to buy shares back from any other business owner who dies, or is diagnosed with a critical or terminal illness. This policy helps owners stay in control and minimises disruption to the business.

Business Loan Protection: this insurance can provide funds in order to repay any loans, outstanding overdrafts, commercial mortgages, or a director’s loans if one of the business owners becomes terminally ill, dies or suffers a critical illness.

Relevant Life Insurance: allows business owners to provide an individual employee (and could include a limited company director) with a death-in-service benefit. It is designed to pay out a lump sum on death or diagnosis of a terminal illness. Premiums would be paid for by the business and may be treated as an allowable expense when calculating the tax liability for the business, provided the local inspector of taxes is satisfied the payments qualify under the ‘wholly and exclusively’ rules.

Do I need Business Protection?

Businesses are structured in varying ways so our aim is to advise you on what insurances your business may require, whether you work as a sole trader, in a partnership, or as a limited company.

The loss of a key person within a business could lead to dire consequences if that business hasn’t prepared to adapt to this type of change. Business protection could help a business continue its trade, if an owner or other key person become terminally ill, die or be diagnosed with a critical illness.

Proceeds from a policy could help ensure that key individuals are replaced, debts are protected, or shares from the deceased partner’s/shareholders estate can be purchased. It can mean the difference between a business surviving or simply being forced to go out of business and affecting all of those with an involvement in it.

What Business Protection could my business need?

As a business owner, you are in the best position to understand how your business works; to identify what, or who keeps it most profitable or running smoothly. Ask yourself the following:

If you, or another key person within the business dies or becomes too ill to work for a significant period, how would this impact the everyday running and bottom line of your business?
If you own a share in a business alongside other owners, what would you want to happen with a persons share in the business if they were to die or become too ill to continue working?
Does your business have any unprotected loans or debts? If so, would the business be able to repay these if the key person(s) who has guaranteed the debt were to die, become terminally ill or suffer a specified critical illness?
As a limited company director, would I like my company to insure me against death for some reason? Also, could my company offer an employee a death in service benefit which may help reward and retain that employee?

How much does Business Protection cost?

Please contact us for a review of any business protection needs you may have. We can provide advice and quotations for any business protection insurances you feel are suitable. Premiums for these types of insurances are normally set up in your businesses name and paid for by your business.

Please be aware that we are not authorised to provide you with advice on whether or not premiums for insurance policies taken out by your business are deductible as a business expense. We do, however, encourage you to seek separate advice on this from, for example, your company accountant (if available) or a qualified tax adviser.