When you’re running a business and thinking about options for insurance, you’re most likely to start by protecting the space that you work in – your shop, your factory, your office. You’ll also be thinking about insuring your goods and the vehicles you use for work. 

But what about the people who create the most revenue in your business? What about the staff who ensure that orders are met, and sales are made? All businesses will have key employees who are invaluable. Consider for a minute the results of losing a key person in your business:

  • You could lose a huge chunk of your knowledge base
  • You could damage your credit status
  • You could lose connections with suppliers and customers

Now ask yourself:

Is your family wealth and lifestyle dependent on your business?

If you answered yes, then you need to think about how you can take some practical steps to minimise potential damage.

Let’s have a look at the kinds of insurance you might want to consider when it comes to staff:

Key person insurance

The business insures the life of a key person, and cover is provided against the loss of profits that might occur from the death or critical illness of the key individual. In the event of either, the proceeds are payable to the business.

Shareholder Protection or Partnership Protection

Both of these types of insurance provide a financial package to the remaining shareholders or partners in a business, with an option to ‘buy out’ the spouse of the deceased member. This can be a simple way to protect families and your business partners interests in one go.

How to make sure your business protects your family

If you are single with no debts, and no dependents, then you may not need to worry about insurance.

But if you have a family who depend on your income, then you need to ensure that you’re adequately covered.

Most of us understand how life insurance can protect our dependents, e.g. to cover a mortgage, but this is only one part of the review we undertake and doesn’t account for all potential eventualities. A review like this is extremely beneficial to you after entering into a marriage or starting a family.

We consider:

Life Insurance

Life insurance is designed to pay out a lump sum in the event of death. People often take out life insurance simply to cover mortgage repayments in this event, but it can be an insufficient amount to enable your family to maintain a reasonable standard of living if you are the sole bread winner. Life insurance is relatively cheap, because (very fortunately) dying young is more uncommon. However, the peace of mind you’ll get knowing that your loved ones will be looked after financially is worth every penny.

Critical Illness

Critical illness insurance will normally be combined with Life Insurance and pays out a lump sum if you’re diagnosed with a critical illness. It can help pay for treatment or care and cover lost income. Typical illnesses covered are heart attacks, strokes, cancer and coronary artery by-pass surgery but other conditions might be covered as well. Not all contracts will provide all the cover you might need, so it’s really important not to shop around for a policy purely based on price alone.

Income Protection Policies

Income protection Insurance replaces your income in the case of you being unable to work due to illness or injury. The insurance policy will replace a significant part of lost earnings, typically a half to two-thirds of your salary, tax free. Unlike accident, sickness and unemployment cover, it will continue to pay until you go back to work or reach your retirement date. It is sometimes offered by employers as part of an overall benefits package and is a very valuable benefit.

Many business owners can be so involved in the day to day challenges of business, that they don’t take the time to think about the future. But getting acquainted with these options early is key if you want to feel:

  • Confident that you’ve protected your business against the risk of a sales drop when you lose a valuable person
  • Safe in the knowledge that your loved ones will be looked after in all circumstances

We can help you to arrange the best protection that your budget will allow. Pop your contact details in the contact box below and we’ll get in touch!

Want to find out more?

Call us on (01474) 853856 and we will put you in contact with one of our advisers, or send us an enquiry by clicking below.

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