Business protection is a crucial element in a company’s financial future but how many have cover in place?
Research by Legal & General in their State of the Nation’s Small and Medium Enterprises (SMEs) report has found:
- 53% of businesses would cease trading in under a year if a key person became critically ill or died
- 65% of businesses have some form of business debt
- 48% of sole traders have no business protection in place
- 70% of the businesses surveyed had not heard of a Relevant Life Plan.
You may have covered the tangible assets in your business, but have you protected the most important asset; the people who contribute directly to your bottom line?
If the answer is no, you could be putting your business at risk. After all, if you lost a key employee, this could impact the day-to-day running of the business, it could hit profits and create problems repaying an outstanding business loan.
Safeguarding your business
Business protection insurance can help mitigate some of the risks. There are three main types of business protection:
- Key Person Insurance – provides a lump sum to the business on the death of an important member of the business.
- Shareholder Protection Insurance – provides a lump sum that will allow remaining shareholders to buy the shares of a deceased shareholder.
- Business Loan Protection – provides a lump sum to help a business pay any outstanding business loans.
Critical illness cover should also be a consideration, as long-term or permanent absence from work could cause serious financial pressures. In fact, 53% of the businesses surveyed said they would cease trading within a year if a key employee were to become critically ill or die.
Business Protection Insurance is designed to keep you trading. That’s why making sure you have the right protection in place should be considered a vital part of running a business.
Get in touch if you’d like to know more about how you can help safeguard your business.