Business Protection

What is business protection and how can it be used to protect a business from the effects of a key person being diagnosed with a critical illness or dying?

Key facts

  • Business protection is an insurance contract that helps protect a business from the financial effects of key people being diagnosed with a critical illness or dying.
  • Business protection is available for partnerships (including limited liability partnerships), shareholders, sole traders and key employees.
  • How the arrangement is set up will depend on the type of business and its particular needs.

How do I assess my business protection needs?

In assessing business protection needs, it is crucial that you and your client consider the impact the loss of a key person, partner or shareholder would have on the business. Royal London has a business protection calculator that can be used to assess your clients’ needs

  • Your client should take a moment and ask themself what would happen if their top salesperson was to suffer a critical illness?
  • What impact would that have on revenue?
  • Would the business have enough funds to survive until a replacement is found?
  • What would happen if one of the partners in the firm died?
  • Would the remaining partners have enough funds to buy out the deceased’s partner’s share from their estate?

Executive Income Protection for employees and directors

Executive Income Protection can help small business clients by protecting against the financial impact of their employee becoming ill or injured and unable to work.

The plan is designed to pay a monthly benefit to the business in the event of a valid claim. This can be used to fund the employees ongoing sick pay so they can meet their financial commitments whilst not leaving them to rely solely on their savings or state benefit.

Cover can include the employee’s earnings, dividends and P11D benefits. Additional cover can be arranged at an extra cost to cover employer pension contributions and National Insurance (NI) contributions.

There are many types of Business Protection covering everything from business and directors loans through to shareholder protection and more, call us today to discuss your needs or contact me via my email

Acca Sage Xero Quick Books

If you're looking for help with your financial affairs, whether personal or corporate, get in touch with one of our experts today...