What Is Business Protection Insurance?
Business protection insurance is a set of policies designed to protect businesses from financial loss due to key person loss, business debt, ownership disputes, or unexpected events.
This type of insurance ensures that a company can continue operating without disruption if a key stakeholder or financial contributor is unable to work, passes away, or suffers a critical illness.
Who Needs Business Protection Insurance?
- Small and medium-sized enterprises (SMEs) – Protects against financial instability caused by unexpected events.
- Partnerships and Limited Companies – Ensures continuity in case of the loss of key shareholders.
- Family-Owned Businesses – Provides protection for succession planning.
- Startups and Growing Companies – Secures financial commitments and investments.
Types of Business Protection Insurance
1. Key Person Insurance
- Covers financial loss if a crucial employee, director, or founder passes away or becomes critically ill.
- Helps fund the cost of replacing the key individual.
2. Shareholder Protection Insurance
- Ensures that remaining shareholders can buy out the shares of a deceased or incapacitated shareholder.
- Prevents disputes and ensures business stability.
3. Business Loan Protection
- Covers outstanding business loans, overdrafts, or personal guarantees if a key borrower dies or becomes critically ill.
- Prevents lenders from forcing asset sales.
4. Relevant Life Insurance
- A tax-efficient life insurance policy for directors and employees.
- Pays out a lump sum to the employee’s family if they pass away while employed.
5. Income Protection for Business Owners
- Ensures business owners and key employees continue receiving income if they cannot work due to illness or injury.
Benefits of Business Protection Insurance
✅ Financial Stability – Prevents business disruption caused by unexpected losses.
✅ Protects Against Debt Risks – Ensures business loans and liabilities can be repaid.
✅ Maintains Shareholder Control – Stops external parties from gaining business control.
✅ Supports Business Continuity – Helps companies recover from the loss of a key individual.
✅ Tax Benefits – Certain policies, like relevant life insurance, offer tax-efficient benefits for businesses.
How Much Does Business Protection Insurance Cost?
Premiums depend on:
- Business size and revenue – Larger businesses may need higher coverage.
- Type of coverage – Key person, shareholder, and loan protection policies vary in cost.
- Age and health of insured individuals – Premiums may be higher for older individuals or those with medical conditions.
Estimated Costs
- Key Person Insurance: £30 – £200 per month (depending on coverage amount).
- Shareholder Protection Insurance: £50 – £500 per month (based on shareholder value).
- Business Loan Protection: £50 – £300 per month (based on loan amount and term).
Best Business Protection Insurance Providers in the UK
- Legal & General – Provides key person and shareholder protection insurance.
- Aviva – Offers comprehensive business protection policies.
- Zurich – Specialises in relevant life and key person insurance.
- Vitality Business Protection – Provides tax-efficient insurance options for SMEs.
How Fraser Bond Can Help
Fraser Bond works with leading insurers to:
- Find tailored business protection insurance that meets your needs.
- Compare policies from top UK providers for the best value.
- Ensure business continuity planning to safeguard your company’s future.
Final Thoughts
Business protection insurance is essential for ensuring the financial security, stability, and continuity of your company. Whether you need key person cover, shareholder protection, or loan insurance, the right policy can safeguard your business from unforeseen risks.
For expert guidance on securing the best business protection insurance, contact Fraser Bond today.
