Looking for the cheapest keyman or best business protection policy can be a minefield, we listen to your needs and present the right policy for you. Not only can we put a policy in place for your current situation but also the unknown. How quickly will a bank turn off credit or call in your company overdraft if they discovered a director/key person critical to the business was to become seriously ill, the answer is immediately.
What is business protection insurance?
Business protection insurance helps businesses to plan for the unexpected and provides a financial safety net for your company in case shareholder, partner or key individual dies. Critical illness cover can also be added to pay out in case of a key individual suffering an illness such as a heart attack or stroke. This ensures that your business continues to run and aims to minimise disruption. Business protection insurance can also be used in other circumstances such as repaying an outstanding loan. Put simply it is life insurance or critical illness cover for the life of either someone crucial to your business or your business owners.
Who is business protection insurance available for?
Business protection insurance is available for:
Limited companies: A distinct legal entity with an independent existence from its shareholders.
Partnership: A business owned by two or more people who work together and can employ other people on a full or part-time basis.
Limited liability partnerships (LLP): Similar to a partnership, but it is a separate legal entity, so the individual members have a reduced personal liability for any business debts.
Sole traders: generally a business that is owned and controlled by one person, although they may employ other people.
How does business protection insurance work?
The way the business protection is set up will depend on the individual business and its needs. Ultimately, the business protection will pay out a lump sum to the business in the event of death or critical illness, providing financial stability and peace of mind.
At Woodward Financials, we work closely with business owners to ensure that they are protected against their biggest financial risks and tailor our advice based on our in-depth knowledge and understanding of our clients, being independent we search the whole market for the best solution for you, it may also be the cheapest.
What different types of business protection insurance are available?
Some of the types of business protection available are:
Key person cover: designed as a financial safety net in the event that a key member of staff (such as a business owner, sales director, or chief financial officer) dies or is diagnosed with a critical illness.
Relevant life cover: also known as death in service benefit which enables companies to offer a lump sum to an employees nominated beneficiary in the event of their death.
Share and partnership protection: enables business owners to maintain control of their business in the event that one of them dies or is diagnosed with a critical illness.
Executive income protection: this provides a monthly payment to an employer if an insured employee can’t work as a result of injury or illness. They payments go towards the cost of an employee’s sick pay, National Insurance and pension contributions.
Things to consider before taking out business protection insurance
In the event of your business faltering due to your death or the loss of partner, there could be insufficient funds to cover the debts. In addition, some lenders may refuse to loan you money for your business if you do not have appropriate business loan protection or key person insurance in place.
If your business is reliant on a key employee, owner or director then key person insurance is something you should consider to protect your business. The right level of key man insurance can give your business financial stability and peace of mind throughout a difficult transition period.
If you are a small business owner and do not yet have enough employees to set up a group death in service benefit for your employees, then relevant life insurance may be a good option. Offering this type of employee benefit can help attract the right talent to your business which attracts tax-relief.
If you are a business owner and don’t yet have any kind of business protection insurance in place, talking to an independent financial advisor at Woodward Financials will help you understand where your vulnerabilities are. We can then guide you through the options of how to best protect yourself, your profits, and your team. Woodward Financials were awarded best wealth management firm in 2021 and again in 2022 and have a team of advisers ready to help guide you through your business protection needs.