Business Protection

Business Protection Insurance

As a business owner of any size have you should consider the impact a death or both long term and short term illnesses of yourself or a key member of your team. Business protection plans will consider the needs of your business in these scenarios and seek to ease the burden of these unforeseen events.

Often they can go beyond mere financial compensation and in the case of key man may have support infrastructure in place to provide a pool of highly qualified individuals to “stand in” whilst you and your business get back on track.

Key Man

Directors and employees with highly specialist skills or knowledge are key employees of the companies they work for. To lose one as a result of a critical illness or death can be damaging to the business. That is why taking out a keyperson insurance to protect the company is a wise move.

Keyperson insurances can provide several benefits. These can include paying the costs of a temporary replacement or recruiting a permanent replacement. They can also cover the cost of death or incapacity of a key member of staff.

The full scope of cover will depend on the type of policy purchased but companies ignore the risks of losing key staff at their peril. Shareholders, bank managers, suppliers and customers may not be so laid back.

These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.

Plans may not cover all the definitions of a critical illness. The definitions vary between product providers and will be described in the key features and policy document if you go ahead with a plan.

Share Holder Protection

Shareholder Protection

Directors’ with share agreements may provide for the remaining directors to purchase the shares of the other shareholding directors should they die or become seriously ill. However there is a risk that the remaining directors may not have sufficient funds to hand when a fellow director passes away unexpectedly or will not return due to serious illness. With small companies they can face problems as the shares can be difficult to sell to another party and are only of real value to those that are connected with the firm. The shares could also be passed to the deceased’s family, but the family may not be able to make a contribution to the future success of the firm and so be made a payment rather than join the firm.

To protect against this a Shareholder Protection will provide a life plan to cover this eventuality. A critical illness protection contract can also be relevant where a director is forced to leave due to serious illness.

These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.

Critical Illness Plans these may not cover all definitions of a critical illness. The definitions vary between product providers and will be described in the key features and policy document for customer(s) who go ahead with a plan.

Partnership Protection

Business partners’ also face similar issues to those of Shareholders of limited companies and so where a partner dies or contracts a serious illness then the remaining partners may have to make a payment to the personal representative(s) or the partner.

To arrange such cover for either of the above requires the understanding and agreement of all concerned. It will also require some careful calculations to determine how much cover is required. However, it will be a comfort to all directors or partners of a business to know that their own or a colleague’s death will leave the other directors / partners with sufficient support to carry out the terms of their shareholders’ agreement / partnership agreement.

With life assurance, these plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.

Critical Illness Plans these may not cover all definitions of a critical illness. The definitions vary between product providers and will be described in the key features and policy document for customer(s) who go ahead with a plan.

Business Insurance