Business Protection Cover
This specialist insurance covers your business in the event of the business owner (or key employee) passing away or becoming ill. We can help you to protect the long term financial security of your business and ensure that it continues to operate should anything happen.
Types of Business Protection Cover
Key Person Protection
What is Key Person Protection?
It’s simply a business insuring itself against the financial loss it may suffer as a result of the death (or critical illness if chosen) of a key person.
Who is a Key Person?
A key person is an individual whose skill, knowledge, experience or leadership contributes to the continued financial success of the business. A key person may be one of a number of people within a business, such as the:
• Managing director
• Marketing manager
• Computer specialist
• Sales manager
Anyone whose death could lead to a financial loss for the business through:
• Loss of profits.
• Having to recruit or train a replacement.
• Important personal or business contracts lost due to the key person not being there to maintain a contract.
• Loss of goodwill which could have a direct effect when it comes to raising capital for the business or attracting new investors.
• Customers and suppliers losing confidence in the business.
How it works
Key Person Protection is life assurance (or life assurance with critical illness cover) on the life of the key person, but owned by the business and the business pays the premiums. In the event of a claim, a lump sum is payable to the employer that can be used to:
● Help with financial pressures
● Pay suppliers
● Support the key person’s family
● Employ someone else in the short term
● Help find a replacement in the long term
Business Loan Protection
If your business has outstanding debts such as a loan, commercial mortgage or director loan account, then a Business Loan Protection could help you.
How it works
Business Loan Protection is a life assurance or life assurance with critical illness policy. The cover on this type of plan is usually a decreasing term insurance plan that reduces in line with the outstanding debt. In the event of a claim, a lump sum is paid to help settle any financial liabilities.
Share Protection Cover
If you lost a shareholder in your business, what would happen to their shares? If you couldn’t afford to buy the shares, they might pass to someone who has no knowledge or interest in your business and who therefore may make decisions concerning the business you would not want. We can help you ensure that does not happen.
How it works
Share insurance protects your business should anything happen to a shareholder ensuring that the business has the right amount of funds to buy back the shares.
Each shareholder in the company enters into a legal agreement regarding the future ownership of the company in the event of the death or critical illness of one of them. This is known as a ‘cross option agreement‘. In the event of a claim, a lump sum is paid out to the remaining shareholders enabling them to buy that person’s share of the business and ensuring the shareholder’s family receive financial compensation.
Call us today for free and friendly advice about Business Protection Cover.