What is business protection insurance, and do I need it?

27.02.24 02:52 PM Comment(s) By Alicia

As rewarding as running a business can be, unexpected events and challenges can quickly arise which can jeopardise the business's stability.

It’s important not to wait until it’s too late, as you never know what obstacle may be thrown in your way! Business protection insurance helps owners plan for the unexpected, by providing cover to ensure that companies can continue with minimal disruption following the loss or illness of one of their key employees or business owners. Business protection insurance refers effectively to a series of life insurance policies (which could also include serious/critical illness cover) designed for businesses, paying a sum of money to ensure minimal financial disruption if the unexpected was to happen.

As a small business, you are legally required to have employers’ liability insurance. This policy covers your business if one of your staff members claims they have suffered an illness or injury because of working for you. However, even though this is the only insurance the law says you must have, it’s a good idea to invest in other policies to protect yourself against unforeseen events and financial losses.

One of the most popular policies for small businesses is public liability insurance. This covers you for claims made against you by members of the public, due to accidental injury or property damage. 

Why is it important?

As tedious as the whole process might sound, we can assure you that it will be worth your time! As a business owner, your brand is most likely your most valuable asset, and by not protecting your business you are putting at risk your revenue, and possibly creating a negative relationship with employees and clients. Having business protection insurance in place can allow your business to recover quickly and minimise the damage if anything was to happen.

So, you might be wondering, where exactly are the payouts typically being spent? 

If a key person sadly passes away or becomes ill, outstanding business loans and debts could be a tricky situation to manage. Business loan insurance provides a payment that aims to cover the outstanding debt. This ensures that operations can continue without the burden of loan repayments.

Should one of the key people become ill or pass away, Key man insurance can help ease any financial pressures which arise. This policy provides a payout to the business, helping to maintain business continuity or compensate for a loss of revenue.

In the sad event of a shareholder’s death, shareholder protection insurance provides a payment to the remaining shareholders, allowing them to purchase the deceased’s stake in the company. This ensures that the ownership of the business remains stable and that the deceased shareholder’s family receives fair compensation for their share of the business. 

What is a business protection agreement?

This refers to a legal contract or arrangement between business partners, shareholders, or stakeholders that outlines how the business will be managed and protected in the event of a death or dispute.

Which kind of business protection insurance is best for my business and how can I purchase the protection? 

With over 25 years of experience in financial services, our friendly protection specialist Darren Bradbury is here to give you peace of mind. Book in a free initial call with Darren where he will be able to guide you down the right path to financial security.

*If premium payments are not maintained, the benefits of the plan will be put at risk. If premium payments cease altogether, the benefits of the plan will cease. The cover may be less than you need if you do not review it regularly.

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