Surprisingly 99.9% of businesses in the UK are SMEs and more than half of these have no protection in place.
So what do we mean by protection? Let’s look at a couple of scenarios below:
Kevin is your most valued employee due to his financial contribution. Have you ever thought
what would happen to your business if Kevin can no longer work?
Due to his knowledge, experience, leadership and more, he contributes to the financial
success of the business but he sadly falls ill and cannot continue to work. The profits of the
business are likely to be impacted.
Aptly named, Key Person Protection, allows you to cover that person if this should happen.
Key Person Protection is available for sole traders, partnerships, limited companies and limited liability partnerships (LLP). They are designed to help pay the policy proceeds directly to the business to help replace that person and cover for the loss of profits that your business may face.
Sandra and Paula
Sandra and Paula own a business together. Sandra sadly dies and Paula would like to own the business outright but she doesn’t know if she has the capital to purchase Sandra’s shares.
Thankfully Sandra and Paula had purchased a shareholder protection policy. This means that the policy will be paid to the surviving partner and that owner can exercise the option agreement to buy the shares of the business.
The above is an illustration of how shareholder protection can work but, in reality, there are a number of options available to the surviving business owner as a result of receiving the proceeds of the policy.
These policies are available to partnerships, limited companies and LLPs.
There is a range of insurances available to businesses in order to ensure continuity.
If you are a business owner or an HR advisor feel free to reach out for a chat.