Business Life Insurance
What would happen if you or a key member of your staff suddenly died or became critically ill?
Have you ever thought about what would happen if you or a key member of your staff suddenly died or became critically ill and how that could impact your business, practically and financially?
Whilst most business owners will typically have business insurance cover for their premises, vehicles or equipment, some of you may not have thought about insuring the lives of key personnel, whose role and input is paramount to the success and, more importantly, the survival of your business.
What is business life insurance?
A business life insurance policy can protect you, your business partners and your staff against unforeseen financial risks that could potentially damage or destroy your business.
There are various different types of life insurance for business owners.
Some policies can provide cover for the business itself (i.e. to help pay off a business loan); others can provide cover for the death or critical illness of key personnel in your business (i.e. a high earning employee, a partner or a majority shareholder).
Business life insurance cover can also be offered to your employees as a benefit. Offering a worthwhile benefit like this can help you employ and retain valuable staff, and make your employees feel valued and financially secure.
Types of business life insurance
There are five main types of business owner life insurance you can take out to provide cover for vulnerable areas of your business or as a benefit to your employees.
1. Key Person Insurance
Key person insurance provides cover for any crucial person who significantly contributes towards a business’s success and whose absence could lead to serious disruption and have dire financial consequences for your business.
Insurance premiums are calculated in accordance with how profitable a key person is.
Key person insurance can also help with the costs incurred when seeking to recruit a replacement for the absent key person’s role.
2. Shareholder Protection Insurance
Also known as ‘ownership protection’, shareholder protection insurance protects against an unscrupulous opportunist (i.e. a vulture-like competitor) who could attempt to buy a deceased shareholder’s shares and try to take over your business.
With this type of policy, other shareholders will receive the necessary funds to cover the cost of purchasing a deceased shareholder’s shares. This will ensure the business remains stable and can continue to operate under the safe custody of the remaining shareholders.
3. Business Loan Protection Insurance
Business loan protection insurance can help cover the cost of debt repayments should your business suffer cash flow issues (i.e. a client has failed to pay their invoice promptly or because something has happened to the business owner).
Debts covered by this insurance can include loans, overdrafts, credit cards or personal guarantees and funds are paid directly to the business by the insurer.
4. Relevant Life Insurance
Relevant life insurance is what business owners can offer to their employees as a ‘death-in-service benefit’ and is an attractive benefit for valued staff.
5. Employee Insurance Benefits
Many employers offer group-term life insurance to employees as an employee benefit but should an employee leave, the policy ends.
Should an employee die whilst still working for your business, a lump sum will be paid out to the deceased employee’s family.
Want to find out more and compare quotes?
Complete Business provides a professional, tailored insurance broker service to help you and your business source the right policy at the right price. Simply fill in and submit our online form providing us with the necessary details about your business and we will provide you with the most competitive quotes from the best insurers, with no obligation to proceed with a purchase.