1. SME owners do need to consider protecting their business
In my experience, a substantial amount of business owners is unaware of the everyday risks they are faced with when it comes to the effects caused by the death or serious illness of a key person or business owner. We don’t like to think of our own mortality or that of our colleagues but it should be a risk you should consider. having a disaster recovery plan in case of a fire, flood or a broke in, and have probably insured against these things, but what about your human capital?
One way owners can help the survival of a business is to consider a Business Protection policy, for different eventualities, including the loss of a key person, business owner or the inability to repay debts.
2. Losing a Key Person can seriously affect your business
Thankfully every business is different, but each one has members of staff who have a direct impact on the cash flow, profits, creditors and brand. A Key Person could be anyone integral to the business, from the owner to a skilled employee, though characteristically difficult to replace.
Research has shown that as much as 40 per cent of businesses would cease trading in under one year if a Key Person died or became critically ill, yet only half of businesses have Key Person cover to protect them when this happens. Additionally, 60 per cent of SMEs said it would take them up to a year to replace a Key Person.
3. Your business borrowing needs to be protected
Business loan cover can protect organisations when faced with the inability to repay loans, helping to pay back any outstanding loans and safeguarding the business owner’s personal wealth. Research shows that a third of businesses have no insurance in place to repay the borrowing should a Key Person become critically ill or die, implying that they would all face financial difficulties at the loss of a Key Person.
4. Don’t be afraid to ask for external advice
It is imperative that business owners do not only take advice from accountants, but advisers who have a good knowledge of Business Protection.
Don’t be afraid to try new things – This is where I believe I can help and add value to your business, offering expert assistance at all stages of its life cycle.
Did you know that in the UK today there are an estimated 5.4m private sector businesses and 95% have less than 10 employees? If you are one of these, not only are you the backbone of the UK economy and therefore important to the UK, but you are even more important to your employees. Losing just one person could put terminal pressure on your business, leading to increased workloads and stress, at a time when the business is in shock. The right advice and protection could make sure that your company is prepared should the unthinkable happen.
Nazira Karim, Primrose Mortgages
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