Business Insurance

Business protection is an insurance contract that helps protect a business from the financial effects of key people being diagnosed with a specified critical illness or dying. The purpose of business protection is to ensure that the business can keep running with minimal disruption in certain specified events, such as a loss of a key person.

BUSINESS LOAN PROTECTION

Business Loan Protection can help your business pay any outstanding overdraft, loan or commercial mortgage, should a key employee or company director die or be diagnosed with a terminal illness (with a life expectancy of less than 12 months) or specified critical illness (if selected).

Business Loan Protection can be taken out on a ‘level’ or ‘decreasing’ cover basis. If a valid claim is made, the cash sum can be used to repay the businesses’ outstanding debts.

SHAREHOLDER PROTECTION

If a shareholder in your private limited company, a member of your Limited Liability Partnership (LLP) or a partner in your partnership were to die, could you afford to purchase their share of the business? If not, there could be significant implications for the future of your business. Shareholder protection can help you protect the ownership of your business in this scenario.

If a business owner dies or is diagnosed with a terminal illness (if life expectancy is less than 12 months) or is diagnosed with a specified critical illness (if selected), a Shareholder Protection Policy can provide a lump sum to the remaining business owners. This could enable the surviving owners to purchase the deceased owner’s share of the business from their estate.

If a business owner dies with no share protection in place, their share in the business may be passed onto their family. The surviving business owners could then lose control of a proportion of the business. The deceased owner’s family may choose to become involved in the ongoing running of the business or could even sell their share to a competitor.

By putting Shareholder Protection in place, you can stay in control of the business by preventing the shareholding from being inherited by an unwanted beneficiary and so reduce disruption at a challenging time for your business.

KEY PERSON INSURANCE

The leaders of a business play a vital role in the success of the company. The loss of one of these leaders can have a detrimental effect. Recent research by L&G found that 59% of businesses believe they would have to stop trading in less than a year after the death or critical illness of a key individual.

Key Person Insurance helps to safeguard against the financial loss brought about by the death, terminal illness (if life expectancy is less than 12 months), or specified critical illness (if selected) of a key person and so could help the business to carry on trading in the event of one of these scenarios. The insurance pay out could be used by the business to replace lost profit or to source and recruit and train a replacement.

EXECUTIVE INCOME PROTECTION

The Executive Income Protection plan helps businesses protect against financial impact due to employees’ incapacity to work. It covers not just an employee’s salary but also dividends and P11D benefits. Additional coverage can be arranged for other employee costs, such as National Insurance and employer pension contributions.

The plan pays a monthly benefit to the business when an employee is absent due to illness or injury and can be used to help fund the employee’s ongoing sick pay. The plan is available for UK businesses, including salaried company directors, to cover their employees.

Don’t forget, our professional friendly advisors are on hand to support you and can help you explore all of your options.