Is Your Business Protected?
8th June 2017
As a business owner, you do everything you can to make your business a success. You may have covered the tangible assets of your business, but have you protected yourself, or those key individuals who may contribute heavily to profits? Could your business continue if one of the owners or key individuals were to die or suffer a critical illness? Without business protection, the death or serious illness of a key member of staff could have a significant impact. Indeed, it could mean that the business has to cease trading altogether. In the case of a partnership, it could mean that a shareholder’s family is forced to take control of a business they don’t know anything about. Business Protection could help make sure that a company can:
  • Pay its debts
  • Replace key employees
  • Protect its profits
  • Let Partners/Shareholders keep control of the business
  • Provide support to a Partner or shareholder’s family.

Compensate your business for Key Person absence

Key Person Protection – insurance against the loss of profits that could result from the critical illness or death of a key individual, by paying out a cash sum so that the business can continue trading. With many small and medium sized companies dependent on a few specialist individuals, Key Person Cover is designed to help protect the business in the event of death or severe illness of one or more key employees. The business would take out a policy on the life of the key person and in the event of a claim, the sum assured is paid to the company to cover such things as loss of profits and recruitment costs.

Lessen the loss of a shareholder or partner

Business Ownership Protection (also known as Shareholder Protection) – insurance which gives the owners of the business a cash sum to buy the shares of a co-owner who becomes critically ill or dies. This lump sum helps the remaining business owners minimise disruption to the business, by providing capital that enables them to buy that shareholder’s or partner’s shares and so keep control of their business. A Shareholder Protection Plan is usually taken out by the Partner in the business on an own life basis and then written under a trust for the benefit of the other partners. In the event of a claim, the sum assured is paid to the Trustees for the benefit of the other partners to secure the financial future of the business.

Protect your company’s financial stability in times of uncertainty

Loan Protection provides a lump sum to cover your business loans and other credit facilities if a business owner dies or becomes seriously ill. In the event you lose a business partner, you may want or need to repay outstanding business loans, some of which may have personal guarantees or have to be repaid when someone dies. Without the right Business Protection Solutions in place, you could end up risking everything you’ve worked so hard to achieve. To find out more, talk to FOCUS.

About the author

Focus Oxford LLP
Marcus Ramsell is a Diploma Qualified Member of the Personal Finance Society & Chartered Insurance Institute (DipPFS). Marcus joined FOCUSåÊin 2014.

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Wednesday 11th September 2019
Oxford Brookes University,
Headington Campus