As a business owner, it is vital that you protect your business against the loss of directors or key staff through death or serious illness. Failure to do so could have disastrous consequences.
If a director or a key member of staff were unable to continue working due to a serious illness or death, it could have a serious impact on your business and whether it could continue to operate. Putting the right levels of business protection in place can be the difference between your business surviving or sinking.
Business protection helps make an already difficult and stressful time a little easier by giving you peace of mind that financially you are protected to overcome the loss.
Types of business protection
There are four main types of business protection available and each should be considered to ensure you have maximum protection and have covered all eventualities. After all, no one plans to become seriously ill so covering all bases gives your business the best level of protection.
- Shareholder protection: shareholders arrange share protection cover in a business to provide funds in the event that a shareholder was to suffer a critical illness or die.
- Partnership protection: business partners can protect themselves against one of them falling critically ill or dying, by allowing the surviving partner or partners to buy back the deceased partner’s portion of the business.
- Loan protection: this type of cover protects against the death or critical illness of any key person, whose loss could negatively affect the business’s ability to repay a loan. Following the loss of key personnel, your bank may decide to recall any loan.
- Key person insurance: employers can take out key person insurance to protect the business against the death or critical illness of an employee with specialist skills or knowledge that is essential for the continued running of the business. Following a claim, cash is injected into the business to fund additional specialist resources to allow the business to continue to operate.
Looking for business protection advice in Cheshire?
If you would like business protection advice, please get in touch via our enquiry form and a member of our team will be in contact to discuss your requirements and the best options for your circumstances.