Business Protection Insurance

Business Protection Insurance is a type of insurance designed to safeguard businesses against financial losses that may arise from unexpected events such as the death, critical illness, or disability of key individuals within the organization.

It provides financial support to help businesses continue operating smoothly during challenging times and mitigate the impact of such events on their operations, revenue, and overall stability.

The specific individuals covered may vary based on the type of Business Protection Insurance policy chosen and the needs of the business. Here are some common categories of individuals covered under different types of Business Protection Insurance:

• Key Person Insurance: This type of insurance covers key individuals within the business whose expertise, leadership, or contributions are essential to its success…
• Shareholder Protection Insurance: Shareholder Protection Insurance covers the financial interests of business owners, shareholders, or partners in the event of death, critical illness, or disability.
• Loan Protection Insurance: Loan Protection Insurance covers outstanding loans or debts of the business if a key individual responsible for repaying the loan dies, or becomes critically ill.
• Relevant Life Insurance: Relevant Life Insurance is a type of life insurance policy that businesses can offer to their employees as a tax-efficient employee benefit. It provides financial protection to employees’ families in the event of the employee’s death.

While it’s never pleasant to consider worst-case scenarios, the reality is that the loss of a key person in your business could have a severe impact. The absence of a crucial team member could lead to a decline in sales and profits, as well as increased workloads for the remaining staff.

Business protection Insurance is a way to protect your business against the death, terminal illness, or critical illness of a key person in your organization. It is designed to provide a lump sum payout in the event of the insured key person’s death or illness during the policy period, helping to compensate for the loss of their skills, knowledge, experience, or leadership.

This money could greatly assist the business in its recovery. For example, the proceeds can be used to replace lost revenue or to find and hire a suitable replacement.

Key Person Insurance is a life insurance policy that covers the life of a key person within a business. It can also include critical illness cover if selected. The employer owns and pays for the policy, so any payout is made to the employer.

If you have Key Person Protection to cover a key individual in your company, you can make a claim under the policy in the following circumstances:

• Death of the insured individual
• Terminal illness (included – when life expectancy is less than 12 months)
• Specified critical illness (if Critical Illness Cover is chosen at the beginning for an additional cost)

A Business Protection Insurance payout could help with the following:

• Loss of profits
• Needing to recruit or train a replacement
• The loss of crucial personal or business contacts because the key person is not available to maintain communications
• Loss of goodwill, which can directly affect the ability to raise capital or attract new investors
• Issues with customer and supplier confidence in the business
• Payment towards unsettled loans