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There’s a saying, ‘expect the unexpected’, and when it comes to business and insurance, that phrase takes on a whole new meaning. When thinking about insurance, business leaders might expect to need cover for their office, equipment and public liability. All of these things are crucial to the running of the business and, in protecting them, business owners are allowing the cogs to turn and for it to generate income with the peace of mind that comes with a robust insurance policy.

However, perhaps astonishingly, long-term illness and even death are often neglected in terms of consideration and protection, both for an entrepreneur’s own life and the lives of key team members. However, if the worst should happen, the impact on a business, if protection is not in place, can be devastating.

To the majority of businesses, its most valuable asset is its people, and yet they often go unprotected. Losing someone who is crucial to the business could leave a company in a perilous position. Whether it’s losing out on revenue through an employee fundamental to sales growth, or the loss of key clients with whom the individual had built a strong relationship, it can have dramatic consequences for businesses of all sizes and across all industries. Additionally, there are often substantial costs associated with hiring and training a new member of staff.

There are four main types of business protection:

Relevant life – Relevant life is effectively a life insurance taken out by an employer for an employee or director that takes a salary from the business

Shareholder protection – In the event that a shareholder passes away, shareholder protection provides the remaining shareholders with a lump sum designed to allow them to purchase the remaining shares and stay in control of the company, removing the risk of the company falling into unwanted hands

Key person insurance – Key person insurance replaces the financial losses that occur when a key employee loses their life or becomes seriously ill and unable to do their job, such as lost sales or contracts

Business loan protection – Following the death or incapacity of a key member of business, business loan protection ensures that any remaining loan repayments are covered, ensuring no financial impact is felt by the business

Small and medium enterprises make up approximately 99% of the business landscape in the UK and typically, these businesses tend to be more reliant than larger operations on a few key individuals that drive business forward. The permanent or even temporary leave of absence for one of these key people can have serious continuity implications for businesses.

David Skinner, from PIB Employee Benefits, says: “Research from Legal & General highlighted that 53% of businesses think they would cease trading in under a year if a key person became critically ill or passed away. Despite this, the majority businesses don’t have any cover in place or are aware of the options available to them.”

There are numerous types of protection you can obtain and each has its place as part of a business strategy such as: Shareholder Protection, Key Person Protection, Business Loan Protection and Relevant Life Protection. PIB will listen to your needs and devise an ongoing strategy to protect and enhance your business.