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Business Protection Insurance

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What is Business Protection and What Does It Cover?

Business Protection is designed to protect an interest in a business, if a key individual or shareholder within the company dies. You can add Critical Illness Cover to your policy to also secure a payout if a key individual suffers a serious illness such as cancer, heart attack or a stroke.

It’s split into three main branches:

  • Keyman Insurance
    Protects against risks such as loss of profits, loss of knowledge, loss of supplier / client goodwill etc. should a key person exit the business through death or critical illness.
  • Shareholder Protection Insurance
    Provides money into the business to buy back a deceased or critically ill shareholder’s shares so the remaining shareholder(s) can retain control of the company.
  • Business Loan Insurance
    Pays off an outstanding corporate debt if an individual key to the successful repayment of the loan dies or becomes critically ill.

Did you know that, according to Legal & General, 53% of the UK’s small businesses think they would cease trading in less than a year if a key employee died or became critically ill and unable to work? Business Protection is there to protect your  company’s future.

Do We Need Business Protection?

The success of almost all small- and medium-sized businesses is dependant upon a few key people and the loss of such a person can often mean the beginning of the end for the business.

These key people can include the business owners, sales directors or indeed any other individual with specialist skills or knowledge essential to the ongoing success of the company.

When many business owners think about protecting their company the first thing that comes to mind is the premises, vehicles and stock.

Nearly everyone has insurance for these, but many forget about their most valuable assets – the people who make the business what it is.

Whatever the individual’s role, their loss can reach beyond just the cost of recruiting and training a replacement including:

  • Loss of profits
  • Loss of important personal or business contacts
  • Loss of confidence from suppliers and customers
  • Loss of detailed knowledge of the businesses processes and systems
  • Having to repay a loan the key person has made to the business
  • Difficulties in meeting existing loan repayments
  • Having to find the cash, perhaps from personal wealth, to repurchase an exiting shareholder’s shares.
Compare Top 10 UK Business InsurersTakes approximately 60 seconds

The Research

According to the abovementioned report from Legal & General…

  • 65% of businesses had some form of corporate debt, up from 32% in 2011
  • Over half of businesses don’t have any kind of Keyman Insurance
  • 26% of business owners were not aware that a Director’s Loan account needs to be repaid on death
  • Over half of businesses had left no instructions in a will or any special arrangements regarding shares
  • 26% of business owners said they would buy back a deceased shareholder’s shares, with the majority of these saying they would raise funds from personal wealth to do so.

What’s the Risk of Passing Away?

Based on ONS life expectancy data (2012-14), the chances of a healthy male passing away within the next 10 years are as follows:

Age 35
Age 45
Age 55
1 in 62
1 in 29
1 in 12

What’s the Risk of Becoming Critically Ill?

Around 80% of all Critical Illness Insurance claims are made up of the ‘big three’ illnesses – cancer, heart attacks and strokes.

  • Around 1 in 4 new cancer cases diagnosed every year are among people aged under 60 (Cancer Research UK).
  • 50% of people born after 1960 will be diagnosed with cancer at some point in their lifetime.
  • Almost 1 million people in the UK have survived a heart attack and more than 1.2 million people in the UK have survived a stroke or transient ischaemic attack (TIA) – and almost half of these are under the age of 75. (British Heart Foundation).

Not every incidence of these illnesses will be covered by Critical Illness Cover. Less severe incidences may not be included in the wording of your policy or may only trigger a partial payout, so it’s important to check definitions carefully.

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Types of Business Protection

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    How Much Does Business Protection Cost?

    The cost of Business Protection depends largely on the amount of cover you need. As with all Life Insurance written on individual lives, each person will need to be medically underwritten for Business Protection, which will involve a series of questions such as:

    • Your health and medical conditions
    • Your age
    • Your lifestyle (e.g. smoking and drinking habits)
    • Your job (riskier occupations tend to cost more to insure).

    The below table details the monthly cost of Life Insurance Business Protection and Life Insurance and Critical Illness Cover for a healthy non-smoking individual aged 35, 45 and 55.

    They’re looking for £150,000 of level cover (i.e. cover that will remain fixed throughout the policy term).

    Age
    5 Year Policy
    10 Year Policy
    15 Year Policy
    Life Only
    Age 35
    £6.21
    £7.10
    £7.88
    Age 45
    £10.51
    £12.66
    £13.73
    Age 55
    £21.40
    £26.78
    £33.55
    Life & Critical Illness Cover
    Age 35
    £27.51
    £32.56
    £35.89
    Age 45
    £59.38
    £72.21
    £81.25
    Age 55
    £130.40
    £158.57
    £179.15
    Premiums correct as of February 8th, 2019

    Compare Top UK Business Protection Insurers

    Business Protection can vary in cost depending on the provider and the profile of the individual(s) you’re looking to get covered, so it pays to shop around. Below are some of the top insurers in the UK Business Protection marketplace.

    aegon

    Aegon

    • Maximum entry age: 83 for Life only / 74 for Life and Critical Illness Cover
    • Minimum term: 1 year for Life only / 5 years for Life and Critical Illness Cover
    • Maximum term: 50 years
    • Maximum cover: No maximum
    • Critical illnesses covered: 43, plus 15 additional critical illnesses
    aig

    AIG

    • Maximum entry age: 86 for Life only / 75 for Life and Critical Illness Cover
    • Minimum term: 3 years
    • Maximum term: 70 years for Life only / 50 years for Critical Illness Cover
    • Maximum cover: No maximum
    • Critical illnesses covered: 41, plus 10 additional critical illnesses
    aviva

    Aviva

    • Maximum entry age: 89 for life only / 64 for Life and Critical Illness Cover
    • Minimum term: 1 year
    • Maximum term: 50 years
    • Maximum cover: No maximum for Level Life / £5 million for increasing life / £3 million for Life and Critical Illness / £2 million for Life and Critical Illness Cover with Total Permanent Disability
    • Critical illnesses covered: 41, plus 11 additional critical illnesses
    legal & general

    Legal & General

    • Maximum entry age: 77 for Increasing Life Insurance / 67 for Life and CIC and Increasing Life and CIC / 74 for Decreasing Life / 64 for Decreasing Life and CIC
    • Minimum term: 1 year for Life / 2 years for Increasing Life Insurance and CIC / 5 years or Decreasing Life and CIC
    • Maximum term: 50 years for Life only / 40 years with added Critical Illness Cover
    • Maximum cover: Unlimited
    • Critical illnesses covered: 39, plus 2 additional critical illnesses
    royal london

    Royal London

    • Maximum entry age: 88 for Life Cover / 69 for Critical Illness Cover
    • Minimum term: 1 year for Life / 5 years for Critical Illness Cover
    • Maximum term: 72 years for Life only / 50 years with added Critical Illness Cover
    • Maximum cover: No maximum for Life / £3 million for Level Critical Illness Cover / £1.2 million for Increasing Life and Critical Illness Cover
    • Critical illnesses covered: 46, plus 14 additional critical illnesses
    scottish widows

    Scottish Widows

    • Maximum entry age: 79 for Life Cover / 64 for Critical Illness Cover
    • Minimum term: 1 year for level cover / 3 years for decreasing cover
    • Maximum term: 72 years for Life only / 52 years with added Critical Illness Cover
    • Maximum cover: £25m for Life / £5 million for Level Critical Illness Cover
    • Critical illnesses covered: 49, plus 8 additional critical illnesses
    vitality

    Vitality

    • Maximum entry age: 75 for Life Cover / 60 for Serious Illness Cover
    • Minimum term: 1 year for Life
    • Maximum term: 70 years for Life / 50 years with added Serious Illness Cover
    • Maximum cover: £20 million for Life / £3 million for Serious Illness Cover
    • Serious illnesses covered: Up to 174
    zurich

    Zurich

    • Maximum entry age: 83 for Life Cover / 69 for Critical Illness Cover
    • Minimum term:1 year for Life / 5 years for Critical Illness Cover
    • Maximum term: 50 years for Life only / 40 years with added Critical Illness Cover
    • Maximum cover: Unlimited
    • Critical illnesses covered: 40, plus 2 additional critical illnesses

    Business Protection Insurance Advice

    Business Protection is more complicated than personal protection for a number of reasons, not least because of the variety of ways it’s paid for and taxed depending on the product that’s right for you.

    Why Speak to Us?

    We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

    • There is no fee for our service
    • We are independent and impartial
      Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
    • We’ve got bargaining power on our side
      This allows us to negotiate better premiums for you than you going direct yourself.
    • You’ll speak to a dedicated expert from start to finish
      You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
    • Benefit from our 5-star service
      We pride ourselves on providing a 5-star service, as can be seen from our 2252 and growing independent client reviews rating us at 4.92 / 5.
    • Benefit from the protection of regulated advice
      You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
    • Claims support when you need it the most
      You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.
    Tom Conner Director at Drewberry

    We deal with companies ranging from small startups to multinational corporations with millions in turnover so we are well equipped to help.

    Please don’t hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.

    Tom Conner
    Director at Drewberry

    Extremely satisfied with the help and advice from Drew, since the beginning him understood what I was looking for and have the patience to help me out with all my questions and doubts. Didn’t tried to be push or annoying calling me all the time like so many did before. At the end we find the perfect medical policy for me and my daughter that covers everything that we need. I more than recommend them and if in the future I need something else for sure I will contact them again. Giving only 5 stars because I can’t give 6!!!!

    Natasha Caversan Mucci
    07/06/2019
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