If the pandemic has taught us one thing, it’s that we can never know what’s just around the corner. Mitchell Gough, director of Q Financial Services, says that makes business protection essential in the modern world.
You’ll know the old saying about life: All we can be certain about is death and taxes.
It’s true, of course. Having lived through the last two years of Covid, we are all now painfully aware of just how little control we have over what life throws at us.
There are plenty of lessons all of us can take on board as we start to recover from the impact of the pandemic, but one of the most significant should surely be the need to protect our businesses as much as we can against the unknown.
Here’s some statistics to think about for a moment or two – all from Legal & General’s State of the Nation’s SMEs report for 2021.
- 96 per cent of the UK’s private sector businesses have fewer than 10 employees – with 55 per cent having two owners.
- 94 per cent recognise they rely on just one key employee
- 60 per cent would close within 12 months of losing a key person
- 75 per cent have some level of business debt
- Average business borrowing to get through Covid is £122,000
The chances are, you’ll recognise your own business in some of those statistics. And you might also recognise yourself in this additional one: Four in ten owners say they wished they had done more in advance to protect their business.
The good news is that it really is never too late to do something about it. And my bet is that it won’t cost anything like the amount you think.
Take life insurance for example. The Legal & General report found that 86 per cent of businesses over-estimated the cost of taking cover for key employees – with the average estimate being a staggering four times higher than the actual cost.
The same is true for income protection. Fifty per cent of those questioned thought it would cost far more than it actually does, with most over-estimating by an average 50 per cent.
Business protection these days comes in all shapes and sizes – so there’s bound to be something which meets your needs.
It might be Corporate Business Protection Insurance, which helps to protect against possible financial losses in the event of the death or critical illness of a business owner or key individual and can ensure that your business survives and continues trading during difficult circumstances.
Depending on how your business is set up, Shareholder Protection might be the order of the day. This allows the remaining partners, shareholding directors or members to remain in control of the business following the death or specified critical illness of a business owner.
If you want to provide a death in service scheme for a key individual then Relevant Life Cover might be the answer. This is a life insurance plan available to employers to provide individual death in service benefit for an employee.
And you can also protect the business against the loss of a vital employee with Key Person Protection, or safeguard yourself with a business loan protection policy.
These are just a snapshot of what is available – and by talking to a good financial planning expert you’ll be able to tailor your protection to precisely what you need.
It’s at least one way to equip yourself with a degree of hindsight before the unexpected happens.
If you would like to know more about how you can protect your business, we will be hosting a special event on March 2 where Mitch will talk businesses through some of the most essential aspects of business protection. Find out more and book.