What is Business Protection?
Business protection is a range of protection/insurance policies which can help protect the survival of a business from financial losses in the event of key people dying , being diagnosed with a critical illness or being unable to work due to disability. The most valuable asset to any business is its people - the business owners, key employees or key people so having the correct plans in place can ensure the continued success of a business.
What are the different types of Business Protection?
Business protection is available to all kinds of business structures including partnerships (including limited liability partnerships), shareholders, sole traders and key people. It can also be used to ensure repayment of a business debt in the event of death or critical illness of an owner, director, partner, key person or sole trader. How the arrangement is set up will depend on the type of business and its particular needs. Below is a summary of the most common types of business protection arrangement.
Partnership or Shareholder Protection - This is used to protect the ownership of the business. If a partner or shareholder dies or is diagnosed with a critical illness, the proceeds can help the remaining owners buy the affected individual’s share of the business. Without protection, the surviving owners could lose control of the business and it could impact its continued success.
Loan Protection - This could be used to repay business debt such as commercial mortgages, directors loan, overdraft, trade creditors etc. If the business loses a key person such as a director with a director loan, the money paid by the policy can be used to clear loans or any other debt. Without the policy proceeds, investors and creditors (such as the bank) may call in debts as they may be no longer confident that the business can keep their up with their obligations.
Key Person Protection - If a business loses a key person who impacts revenue, the policy can give the company a cash injection, allowing the company breathing space to either replace lost profits or possibly recruit a replacement.
Relevant Life Cover - Relevant life insurance is a type of policy that a business can take out to provide life insurance for an individual employee. It's an alternative way employers can provide death-in-service benefits for employees outside of a registered group life scheme, whilst potentially providing tax efficiencies.
When do I need Business Protection?
Every business, from moment they are created!
When business owners think about protecting their company, they firstly think of assets such as vehicles, premises and stock.
While nearly every business insures these assets, many may forget about what’s most valuable — the people. No matter the size or age of your company, there’s usually at least one or two key people the business simply couldn’t do without.
Who needs Business Protection?
Who handles Business Protection?
To book a call back from one of our Business Protection specialists here
To read more about business protection have a look at our 'Business Protection Brochure' by clicking here.
Just Wealth has a number of experienced, licensed Business Protection advisers who can assist you in your financial planning.