What is business protection ?
The term “ what is business protection” (where related to insurance) covers a huge range of different types of policies – from income protection, critical illness, life insurance, shareholder protection through to the better known health insurance that many businesses now offer employees as standard within an employee benefits package. Then you also have protection in terms of inheritance and how you wish to leave your legacy behind.
So what protection is critical?
Around 41% of UK adults have life insurance, many of us have been sold payment protection insurance (the infamous PPI scandals withstanding) and approximately 16% have health insurance of some sort. However only 9% of us have an income protection policy which provides a monthly tax free payment if we become unable to work for medical reasons. Whilst many of us may have long-term sickness policies as employees (check your contract), for the 4.27 million self employed workers (as of June 2024) this will not be applicable.
When it comes to our health, with NHS waiting times increasing year on year, many of us simply can’t wait to access vital healthcare – in 2022, 87% of private virtual GP appointments were utilised through workplace schemes. Insurers reported arranging 1.2 million mental health counselling and therapy appointments in the same year – 94% of which were again, accessed through employee schemes. If you’re an employer, and have not yet made provision for employees – ensuring your workforce can utilise medical services quickly and easily can only benefit the business as a whole.
Similarly life insurance should be a non-negotiable when it comes to our family, and making sure there are sufficient funds to take care of loves ones should the worse happen. However with so many middle earner being squeezed by the recent cost-of-living crisis, it is not altogether unsurprising that monthly commitments that are not deemed absolutely critical are paused.
Protecting your business
If you’re a business owner with employees, shareholders and/or partners, ensuring clear policies and procedures are in place should an unexpected situation occur, can literally save the bottom line of your business. As companies grow, it’s important to continually review existing policies and get independent advice to ensure you’re covering all eventualities.
Protecting your legacy
Whilst we may wish to live forever, there are two things guaranteed in life – death and taxes. And at some point, you may fall ill to the point of being incapacitated mentally, which means that without a LPA (lasting power of attorney) in place, your assets could be frozen and the State would need to step in to manage your health and finances, rather than someone you know and trust.
If you die without a will, known as intestate, this also means that your assets may not be divided as you wish them to be. Having a clear up-to-date will ensures that your legacy is passed on as per your instructions without any grey areas that can be clouded by grief and personal circumstances. Bear in mind that if you drew up a will some time ago and significant life events have taken place since, ie divorce, then it may be necessary to update it.
If you want any assistance either reviewing existing business insurance protection, or discussing different types of individual protection, wills and LPAs, please get in touch with our team.
