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BUSINESS PROTECTION INSURANCE

Business Protection Insurance That Safeguards Your People, Profits, and Future.

THAT'S JUST WHAT I NEED

What Is Business Protection Insurance?

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Business protection is a type of insurance that helps businesses stay financially secure if a key person, business partner, or owner dies or becomes critically ill. It ensures that your business can continue to operate smoothly during unexpected challenges.

Business protection insurance is vital for companies of all sizes. It provides a safety net to protect your business’s future and its people. Let’s explore how it works and why it’s important.

What Does Business Protection Cover?

Business protection insurance offers financial support when the unexpected happens to someone vital to the company’s success. Policies usually cover:

Key Person Insurance

  • Protects against the loss of a key individual (e.g., a founder, manager, or top salesperson).
  • Pays out a lump sum to help cover lost revenue, recruitment costs, or temporary staffing.

Shareholder or Partnership Protection

  • Provides funds to allow remaining business owners to buy the shares or equity of a deceased or critically ill partner.
  • Prevents shares from being passed to family members who may not want to be involved in the business.

Business Loan Protection

  • Covers outstanding business loans, such as overdrafts or director loans, if a key person dies or is critically ill.
  • Ensures debts don’t become a financial strain on the company.

Why Is Business Protection Important?

Businesses often rely on a few key individuals for their success. If one of them can no longer work, it can disrupt operations, reduce profits, or put the business at risk. Business protection provides the financial cushion needed to adapt to these changes.

For example, it can:

  • Help recruit or train a replacement.
  • Keep cash flow steady during tough times.
  • Protect ownership structures and avoid disputes.
  • Ensure business debts are repaid.
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Without business protection insurance, the financial strain could lead to downsizing, ownership changes, or even closure. Therefore, business protection is about safeguarding your company’s future. It provides stability and support when unexpected events disrupt your plans. By planning ahead and choosing the right policy, you can protect your business, employees, and partners from financial hardship. It’s a small investment with big benefits for long-term success.

Do you need more information about business protection insurance? Please fill out the form below and one of our team will get back to you shortly.

Frequently Asked Questions

Is business protection insurance relevant for sole traders or small partnerships?

Absolutely. Business protection insurance isn’t just for large corporations; it’s equally vital for sole traders and small partnerships. If your business relies heavily on your expertise or that of a partner, the unexpected loss of that individual due to illness or death could have significant financial implications. This insurance can provide a financial safety net, helping to cover debts, replace lost income, or facilitate the smooth transition of business ownership.

While both provide financial support in the event of death or critical illness, business protection insurance is tailored to safeguard the financial interests of a business. It ensures continuity by covering aspects like key person loss, share purchase funding, or loan repayments. Personal life insurance, on the other hand, is designed to support an individual’s family or personal beneficiaries.

The tax treatment of business protection insurance premiums varies depending on the type of policy and its purpose. For instance, premiums for key person insurance are typically tax-deductible as a business expense, but the proceeds may be taxable. Conversely, premiums for shareholder protection policies are usually not tax-deductible, but the benefits are often received tax-free. It’s advisable to consult with a tax professional to understand the specific implications for your business. You can find out more information by clicking on this link to the government’s business income manual page.