Types of Business Protection

​Key Person Insurance

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Key person insurance protects your business against the financial impact of losing someone critical to its operation. This could be a founder, a director, a top salesperson, or anyone whose absence would directly affect revenue, client relationships, or day-to-day operations.

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If a key person dies or is diagnosed with a specified serious illness, the policy pays a lump sum to the business. This can help cover lost profit, recruitment and training costs, loan repayments, or simply provide breathing space while the business adjusts.

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Please note that key person policies are owned by the business and pay out to the business, not to the individual or their family.

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Relevant Life Insurance

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Relevant life insurance is a tax-efficient way for employers to provide life cover for directors and employees. It is arranged and paid for by the business, but the benefit is paid to the employee’s family or dependants if they die during the policy term.

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Unlike a group life scheme, relevant life policies are set up on an individual basis. This makes them suitable for smaller businesses, limited companies, and directors who want to arrange meaningful life cover in a cost-effective way.

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Premiums are generally treated as a business expense and are not usually considered a benefit in kind, which can make this a more efficient option than a personally held policy for eligible individuals. We recommend confirming the tax treatment with your accountant as individual circumstances vary.

Please note that these policies do not have a cash-in value and will end if premiums cease.

 

Shareholder and Partnership Protection

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If a business owner dies or becomes seriously ill, their share of the business may pass to family members or other beneficiaries who have no involvement in the company. This can create significant uncertainty for the remaining owners and for the business itself.

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Shareholder and partnership protection helps the surviving owners purchase the departing owner’s share at an agreed value. It is usually arranged alongside a legal agreement - known as a cross-option agreement - which sets out how the share transfer will work.

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This type of cover gives all parties clarity and financial security at what can be an extremely difficult time.

Business Loan Protection

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If your business has an outstanding loan and a key person or director dies or becomes critically ill, the lender may still require repayment. Business loan protection covers the outstanding balance so that the debt does not fall on the business or the remaining owners at an already difficult moment.

 

Director and Executive Income Protection

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If a director or key employee is unable to work due to illness or injury for an extended period, the financial impact on the business can be significant. Director income protection provides a regular monthly payment to help cover their salary or cost of replacement, giving the business time to manage without putting other people or finances under pressure.

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Private Medical Insurance for Directors and Employees

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Private medical insurance gives directors, key people and employees faster access to private diagnosis and treatment for new conditions. For a small business, getting a key person back to work sooner can make a real difference to day-to-day operations.

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A business can arrange cover for one person or the whole team. Premiums paid by the company are usually treated as a taxable benefit for the employee, so we recommend checking the tax position with your accountant.

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Please note that private medical insurance does not usually cover pre-existing conditions, long-term conditions or emergency care. It works alongside the NHS rather than replacing it.