Business protection insurance is an important consideration for any business owner. It can help to protect you, your employees, and your business from potential losses in the event of the unexpected happening. Find out more…
Business protection provides cover against potential losses to the business caused by a director or key person in the company or being diagnosed with a serious illness or passing away. It is available to any limited company and should ideally be purchased by anyone who owns a business or is involved in running one.
The type and level of business cover you need will vary depending on your business. It’s important to speak with an experienced business protection adviser to ensure you get the right amount and type of cover.
Here’s a brief overview of the different types of cover…
Directors Share Protection
This covers business owners so they can afford to purchase the share of a business left by a deceased partner or shareholder. If a business partner dies, their shares will most likely go to their spouse or partner, which could give that person a controlling share of the business. This situation could present challenges for the company if that person has no experience in the sector. A Directors Share Protection policy means funds are available for the surviving director to purchase the shares from the deceased person’s spouse or family. This gives peace of mind to the family of a deceased director, as they know they can sell the shares to the other directors easily and without much stress.
This means that companies can offer a death-in-service benefit to employees. It pays out a tax-free lump sum on the death or diagnosis of a terminal illness of an individual – usually company directors or senior employees. It is a tax-efficient way to offer life cover.
Key Person Insurance
This pays out a lump sum on the death of an insured key person in the business or if they are diagnosed with a serious illness. It’s paid as a lump sum to help the business recover from losing a director or another senior important person in the company.
You may be wondering what the difference is between Relevant Life and Key Person insurance, as they do sound similar. Key Person is aimed at protecting a business by providing funds to help it recover from the loss of a significant person. Relevant Life is intended to protect the family of an employee by offering a tax-free lump sum to the family if their loved one passes away.
How much does business protection insurance cost?
The cost depends on several factors, including the type of cover you need. Seek expert advice – we’re here to help with more information on business protection insurance and can advise you on what would best suit your personal situation. Nick Stewart is our business protection adviser and will be happy to help you.