Protection
Business Protection Insurance: Keep the Business You Built Safe
If a director, partner or key employee died or fell seriously ill next month, what would happen to the business? Three types of cover answer three different versions of that question.
- Key person cover
- Shareholder protection
- Relevant life cover
- Whole of market
Free, no obligation, and no credit check to get started.
Small businesses concentrate risk in a few people. One person often holds the client relationships, the technical knowledge or the licence the business trades on.
Business protection puts money into the company, or into the right hands, at the moment that person is no longer there.
Key Person Cover
Pays a lump sum to the business if a key individual dies or is diagnosed with a serious illness. The money covers lost profit, recruitment costs and the gap while a replacement gets up to speed.
Sizing it is a business calculation: what proportion of profit depends on that person, and how long would replacing them realistically take.
Shareholder and Partnership Protection
If a shareholder dies, their shares usually pass to their family, who may have no interest in running the business and every interest in selling. The surviving owners then face buying back shares they cannot afford, or working alongside someone they did not choose.
This needs a cross option agreement drawn up alongside the policies, giving each side the right to buy and sell at a fair valuation. A solicitor prepares it. Without it, the money exists but the mechanism does not.
Relevant Life Cover
A death in service style policy for a single employee or director, paid for by the company. Premiums are usually an allowable business expense and are not normally treated as a benefit in kind, which makes it a tax efficient way for a director to hold personal life cover.
It is one of the most useful and least known products for small limited companies.
Business Loan Protection
Many business loans and commercial mortgages carry personal guarantees from the directors. Cover written to clear that borrowing prevents a lender pursuing a family for a business debt. If you have a commercial mortgage, this deserves a conversation.
No paperwork and no credit check. An adviser calls you back with your real options.
Start nowor call 0117 370 6363Frequently Asked Questions
Who owns the policy, the company or the individual?
It depends on the type. Key person and loan protection are usually owned by the business. Shareholder protection is normally held in trust for the other owners.
Is it tax deductible?
Often, particularly relevant life cover and some key person arrangements, but it depends on the structure and the purpose. Confirm with your accountant.
How do we value a key person?
A common approach is a multiple of their contribution to profit, or the cost of replacing them including lost revenue during the gap.
Do we need a solicitor as well?
For shareholder and partnership protection, yes. The cross option agreement is a legal document and the cover does not work properly without it.
Protect the people the business depends on
A short conversation about who holds the risk, then real numbers for covering it.
Your home may be repossessed if you do not keep up repayments on your mortgage.
We are not tax advisers or solicitors. Tax treatment depends on individual circumstances and may change.
Cross option agreements must be drawn up by a solicitor.
Cover levels, premiums and policy terms depend on your age, health and circumstances. Policy exclusions apply and are set out in the insurer’s key features document.
For mortgage and insurance we do not charge any fee as we are remunerated by commission from lenders and providers.
Infinity Financials Ltd is directly authorised and regulated by the Financial Conduct Authority, FCA registration number 993949. Infinity Mortgage is a trading style of Infinity Financials Ltd.