Is your Business Protected? Business Protection Blog 

Date blog written: 24/08/2023 

Business owners understand how important they & their people are to their businesses but many do not realise they can protect their business from their death, critical illness or being off work sick. 

In this blog we will summarise the main business protection products and how you will know if you need it. 

Business Protection: Shareholder Protection 

When an owner or partner dies, their stake in the business is likely to pass directly to their own family. If they were a majority shareholder, this could mean that the remaining owners lose control of the business and have to work with the spouse or child of a former owner; or worse, the person or people they agree to sell their stake to. 

To prevent this, each shareholder can take out shareholder protection which will enable the remaining shareholders to purchase the deceased’s shares from their beneficiaries. Cover can also be added in the event of critical illness. 

How to know if you need shareholder protection: 

If you do not own 100% of your businesses’ shares, you should consider shareholder protection. 

Business Protection: Key Person Protection 

Most small businesses insure their premises & their stock but many don’t insure key individuals who are arguably just as vital to the business’ success. This can leave the business vulnerable should a vital employee become critically ill or die. 

For example, if one of your top sales people became critically ill and could not return to work, this may affect the relationships with your key clients or lead to reduced orders and turnover.  

How to know if you need key person: 

If you are the owner or partner in a small business, it’s worth identifying those individuals who are essential to the success of your company. If you think their loss would have a financial impact, then you should consider key person protection. 

Business Protection: Business Loan Protection 

Most small businesses have some form of debt, be it overdrafts, loans or commercial mortgages. These loans can help a business prosper and grow. But a significant proportion of small businesses do not have any form of insurance protecting this debt. If an owner died, or became critically ill, the repayment of these loans could be adversely affected. The owners of a business can put in place insurance cover to pay off debts in the event of death or critical illness. 

How to know if you need debt protection: 

If your business is liable to pay any type of debts you should consider business loan protection. 

Executive Income Protection 

This cover is designed to pay a monthly benefit to the business if an employee (including business owners who are paid via PAYE) is unable to work due to incapacity. This can fund the employee’s sick pay meaning they do not have to rely on state benefits. You can also add additional cover to include employer pension contributions & National Insurance contributions. 

How to know if you need executive income protection: 

If you are an employed business owner and/or have key people in your company, you should consider executive income protection. 

Relevant Life Cover (Death in Service Benefit for employees) 

This cover pays a lump sum to the employee’s family if they die or are diagnosed with a terminal illness with a life expectancy of less than 12 months. Employees will view this valuable benefit as a reward for their hard work & it may increase loyalty & staff retention. Employed partners & company directors are also eligible for this cover. 

How to know if you need relevant life cover: 

If you have employees, you should consider relevant life cover. 

Taking specialist advice from us will ensure that you end up with arrangements that meet your needs and budget. We do not charge for our advice on business protection. 

Your accountant will also play a key role in the advice process as they will help you to understand any tax implications or tax benefits. 

For more information or to book a consultation with one of our advisers. Call us on 01455 63 61 63 or click here.

The information contained within this blog was correct at the time of publication (24/08/2023), and is subject to change. 



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