Small and Medium enterprises form the backbone of the UK economy, making up 99% of the 5.4 million businesses. In Northern Ireland specifically, the latest 2019 figures show there is over 124,000 small and medium-sized business across the country.
Yet research shows that there is a lack of awareness of business protection and evaluation of all the potential business risks. This research shows that 52% of businesses would cease trading in under a year if a key person died or became critically ill.
We can help with a wide range of business protection policies:
What Protection Should I Consider?
Business Loan Protection
Despite over 50% of businesses surveyed acknowledging that their company had some form of business debt, only 18% of businesses had considered cover for the illness or death of a key person and no mention was made about life cover to protect business debts or loans.
A large percentage of business loans will require some form of security by the lender and in the majority of cases, the business owners are using their personal wealth as security. A personal guarantee (often with unlimited liability) will be putting their own assets, such as their home as security. Instead of exposing their personal wealth to this level of risk, an insurance policy could be a much simpler solution.
Key Person Insurance
The average director's loan was calculated at £169,000 and 28% of the businesses surveyed did not realise that a directors loan is a debt owed by the business to the director and would need to be repaid on the directors’ death if requested by their estate. 99% of businesses had at least one key person in their organisation and 38% stated that they had 3 or more key people.
In a small-sized business, the loss of just one key person can have a significant effect, with 52% of businesses stating that they would cease trading in under a year if a key person died or became critically ill
Share or Ownership protection
Nearly half of the businesses surveyed had no arrangement or provision for their share ownership. Share protection can minimise the business’s risk and uncertainty and maintain business ownership if a business owner dies or is diagnosed with a critical illness. It can ensure that business ownership is controlled by the surviving shareholders whilst the deceased’s family is fairly compensated financially for the value of their shares.
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