Protecting your business from the unexpected
16th August
Most people will insure what they consider to be the essentials, their car, their phone, their holiday, their home. However, surprisingly few business owners will apply the same logic to their company and fail to take out the protections necessary to guard against the worst happening.
Stephen Palmer of Cranwell Wealth Solutions discusses the right insurance policies to have in place to save you, and your family, enormous amounts of stress and money if things don’t work out as planned for your business.
Starting a business is inherently risky, so it’s vital to have the right protections in place – even if it can be uncomfortable to think about your plans being derailed by unforeseen events such as serious illness. Yet many entrepreneurs don’t even consider taking a few simple steps to protect their burgeoning business when starting up and therefore risk being stung further down the line.
There are various risks which need to be considered at differing stages of a company’s growth. It’s important to think about and discuss every potential scenario that could befall your business and take out the relevant policies to help protect your company. This will ensure you protect your family’s future as well as your own.
There are essential must-have protections such as critical illness cover, professional indemnity insurance and life insurance to have in place if you are just embarking on your business journey. Then, as the business grows, further protections become important including:
Shareholder protection (business succession planning protection): This ensures the remaining shareholders can keep control of the company if one of them becomes seriously ill or dies.
Business loan protection: Most businesses have some form of debt. Having business loan protection in place means you will have help meeting any outstanding financial commitments should you become critically ill or die.
Key-person protection: Recognises key people in the company and the impact on profits if one of them becomes ill or dies. A key person can be anyone who can be justifiably described as integral to the business.
Relevant life insurance: This tax-efficient form of life insurance is taken out by the company for an employee and pays a lump sum to their family should they be diagnosed with a terminal illness or die.
Group schemes: You can support the financial wellbeing of employees, as well as the business itself, by introducing group employee benefits such as income protection, critical illness cover and private medical insurance.
It’s easy to shrug off the need for protection by thinking you’re unlikely to suffer from adverse events or believing that, if you do, your personal savings or cash in the company will cover it. This is not something you can rely on if the worst does happen. Instead think of all possible scenarios and consider the main business protections.
Talking to an expert is incredibly helpful. At Cranwell Wealth Solutions we will discuss your current business situation with you and explore the various protection options for your specific circumstances. Get in touch with us today to arrange a non-obligation appointment to discuss the best business protection options for you. Simply call one of our advisers or pop into our Heathfield branch.
01435 866 101
