Securing your company’s future

Business Protection is a crucial element in a company’s financial future, but how many have cover in place?

According to a study from Legal & General, 53% of the UK’s small businesses think they would cease trading in less than a year, should a key employee die or be diagnosed with critical illness and unable to work.

These figures ought to concern most business owners – especially given that the Federation for Small Businesses also reported around 50,000 SMEs go under each year because of late loan repayments – and it’s a trend that could continue given the uncertain economic climate. Worryingly, approximately 60% had dipped into their personal savings to fund their business.

Protecting the most important assets

You may have covered the tangible assets of your business, but have you protected your most important assets: the people who directly contribute to your profits?

If the answer’s no, ask yourself:
• how would your business cope if a key employee suddenly died?
• would the business have to find the money to pay back any loans?
• what if you became critically ill?
• can the business afford to fund a suitable replacement until you’re fit to return?

If the unexpected happened, it could pose a serious risk to your business.
Taking out Business Protection can help to cushion the financial impact of these unplanned events, including:

• repaying, or part repaying, an outstanding business debt
• funding the recruitment of specialist staff
• purchasing the shares from a deceased business partner or director’s estate

Every business will have different protection needs depending on their size and nature, so it’s important to get advice on the cover available and how it might suit your circumstances.

Smaller business; greater risk?

The loss of a key employee is likely to have a much greater impact on the running of a small business compared to a larger organisation, because there will be less resource to pick up the pieces and keep everything running smoothly. But despite the risk, smaller companies are least likely to have business protection in place, yet these are the very businesses who may need this protection the most.