Most businesses are insured against fire and theft and weather damage. But too few businesses insure something much more important. Too few businesses protect their people.
What is business protection?
Business protection is a vital component in safeguarding your company's financial stability and future. It encompasses a range of strategies and policies designed to mitigate potential risks and ensure continuity in the face of unforeseen circumstances. Let's explore the definition, purpose, types of policies, and operational mechanisms of business protection.
Business protection refers to an array of insurance policies aimed at providing financial support to companies during times of crisis or uncertainty. The primary objective of business protection is to shield businesses from potential risks such as the loss of key individuals, accidents, illnesses, or legal disputes. By securing appropriate business protection, you can protect your company's financial interests and ensure its survival in challenging times.
How does it work?
Business protection policies typically involve paying regular premiums to an insurance provider. In the event of a covered incident, such as the death or critical illness of a key person, the policy pays out a lump sum or regular income to the company. This financial support can be utilised to cover ongoing expenses, repay debts, recruit and train replacement staff, or ensure business continuity during challenging times.
What products are available?
Business insurance breaks into two columns. Protections for employees, and protection for those key people and decision-makers who are responsible for the business.
Protection for employees:
- Group life insurance
- Group income protection
- Group critical illness insurance
- Employee benefits
Protection for directors / the business:
- Key person insurance
- Loan protection
- Executive income protection
- Shareholder protection
- Dividends protection
- Relevant life cover
Types of protection for employees
Types of protection for directors and executives
Group critical illness insurance pays a lump sum to an employee if ever they’re diagnosed with a life-changing illness and they survive the stated survival period of the plan (usually around 14 days). The diagnosed illness must meet the definition of the plan and be of a specified severity as listed in the policy terms and conditions. The critical illness's covered in the policy details and the survival period will depend on the chosen provider.
Some policies also offer critical illness cover for employees’ children and/ or Civil Partner’s at no extra charge. Premiums are met by the employer but it’s the employee who receives any claims payments.
If your company relies on the skill, leadership, reputation or client-book of a key person or people, the P&L sheet will feel it if that person’s not around. Key person insurance pays funds to ensure continuity if you’re down a key performer.
The funds can cover recruitment, training and overtime and can even reimburse the value of any lost contracts / profits that result from a key person’s absence.
This is when a business offers death-in-service benefits to its employees, including shareholders and directors. It’s a tax efficient way for a business to shield employees’ loved ones from the financial impact of death.
Relevant life cover can be a valuable addition to any corporate benefits package, helping staff retention and even recruitment in a competitive market in an era where employee wellbeing is top of the agenda.
Executive income protection provides directors and employees with a regular replacement income if they can’t work due to sickness or injury.
An income protection claim usually pays out between 50 and 70% (sometimes more) of an employee’s gross income. Generally speaking, it’s paid each month so the sick team member can keep up with their regular bills and outgoings.
In many cases, payments also cover the employer’s National Insurance and pension scheme contributions on behalf of the employee, which allows retirement plans to stay on track.
Shareholder protection provides the funds to the surviving shareholders, so they can purchase the shares from the deceased’s estate, without paying un-necessary taxes.
Without shareholder protection, fellow owners may struggle to buy back control of their business, potentially unsettling the company and its plans.
Company shareholders often take large portions of their income through dividends which, unlike a fixed salary, can vary in value and frequency, month to month.
If a company director or shareholder suffers an illness or injury and has to take time off work, dividends protection can ensure a vital part of their income keeps coming.
How much does business insurance cost?
We all work to provide for ourselves and our families. Sometimes we even have enough money left over for the fun things in life.
Business protection not only provides tax efficient solutions to your personal financial resilience needs, it can also help secure the future of your business if you, a business partner or your employees health takes a turn for the worst.
Making protection part of a business insurance programme should be a must for any business.
Why LifeSearch?
Independent advice
We’ve been protecting the UK since 1998. That’s hundreds of thousands of families and businesses, and well over 1.9m individuals’ lives. We’re rated 'Excellent' from over 22,000 Trustpilot reviews; written by customers just like you.
As an independent protection intermediary, our loyalty is to you – not to insurers or their products.
Support for your business
Our role is to identify the protection policies that’ll work for your business and its people in the most effective and efficient way.
Last year, our business insurance division helped many business owners and company directors to build in new protections for people and profits in the aftermath of the Covid-19 pandemic.
Claims
Above and beyond whatever additional benefits your insurer offers, we back up our service with a dedicated claims team.
LifeSearch was one of the first UK brokers to establish a dedicated customer claims team. Our specialist team can handle the claim on behalf of grieving loved ones to ensure as quick and efficient a process and pay-out as possible.
A Little more about LifeSearch
Life insurance isn’t fun. There are several kinds of life insurance policies to choose from, and dozens of providers with their own versions of those products.
Without LifeSearch in your corner that’s a lot of reading … reading you don’t have to do.
Easy guides to help you get started
What is group life insurance?
Are you a business owner? We think you should know about group insurance. Find out why in this guide!
By Katie Crook-Davies, Protection Writer
4 min read
The Difference Between Key Person & Relevant Life
We tell you the differences between Key Person Insurance and Relevant Life Cover.
By Alan Richardson, Head of Business Protection & Group
3 min read
Five reasons to use a protection adviser
This guide explains what protection advisers do and how they can help to get you and your family protected.
By Katie Crook-Davies, Protection Writer
5 min readReady to take the first steps to get protected?
LifeSearch are recommended by
