for you and your business 1
People are important in my business As a business owner you know what you need to make your business a success. Suitable premises, machinery and your computer systems may all be important. But have you protected what is probably your most important asset, your people? People are important Often the success of a business is dependent on one or two key people. But it can be easy to overlook the importance of those people especially when you re busy dealing with the day to day running of the business. I already have insurance You may already have protected your business from other risks. You may have insured your premises and stock against fire or flooding. If you employ people, you will have employer s liability cover to protect against the cost of providing compensation to an employee if they are injured at work. You will have insurance for the company cars. But have you protected yourself from the impact the loss of a key person would have on your business? The value of protection insurance Taking out insurance to protect the key people in your business may not be exciting, like launching a new product or buying new premises to expand. But it can make sure that you stay in business if the worst were to happen and it does give you, your family and your co-owners peace of mind. The fewer key people, the higher the risk There is a 68%* chance of one man out of a group of four being diagnosed with a critical illness during his working life. So even larger businesses that are owned by, or reliant on, a small number of key people face a really high risk. Of course it s easy to ignore the statistics, but just think about the impact that a key person becoming critically ill would have on your business. So no matter what size your business is, if it s important to you, maybe you should consider protection insurance? * Munich Re 2007 68% chance of one man out of a group of four being diagnosed with a critical illness during his working life. 2
People are important in my business The value of key people The key person may be you, the person whose vision created the business. It could be the sales manager, whose contacts and relationships with customers make sure that sales remain on target and the business profitable. Or it could be a designer responsible for the development of new products. Often a person s value to the business is reflected in their remuneration package. When you are trying to identify the key people in your business this can be a good place to start although this may not always be the case. Whoever it is, the loss of that person could have a devastating effect on your ability to continue running your business. It s often easy to believe that the unthinkable only happens to other people, but what would happen to your business if you or someone key to your business we to die prematurely or suffer a critical illness? Protection insurance can t stop the unthinkable from happening but it can make dealing with the consequences a little easier. Without adequate business protection you could end up risking everything you ve worked so hard to achieve 3
Insurance isn t a priority for me When managing a business it s understandable that the priority is to spend time making sure things run as smoothly as possible. This could explain why so few businesses have enough of the right type of protection in place. Key person Cost of replacement Owner/Proprietor Managing Director Sales Director Finance Director Product Designer Production Manager Specialist Staff Technical Staff Total Making the right choice It makes sense to protect yourself and your key people in case things go wrong. Have you considered the consequences if you or another key person in your business were unable to work due to illness or injury? The consequences: Sales could fall. New products could be delayed. It could create a lack of confidence from your lender, suppliers, customers and your other employees. Loans may be called in. Suppliers may demand payment up front. Customer may choose to go elsewhere and Without the leadership of you or your key person, your employees may decide it is time for them to move on. 4
Insurance isn t a priority for me It s not just about the business You ll also have financial commitments beyond the business itself. Your mortgage, utility bills and all the normal expenses of providing for your family. These would still need to be paid. And, although you may think you have sufficient savings and investments to rely on, they are likely to run out quicker that you would expect. I can t afford protection can I? Modern protection plans allow us to tailor cover to meet your business needs and often more importantly your budget. You can take out Life Cover on its own, Critical Illness Cover on its own or you can combine either of those with different amounts, terms and options to suit your business needs. With this cover in place if you or a key person dies or is diagnosed with a critical illness the benefits for the business could be: The ability to repay loans. Money to recruit a temporary or permanent replacement. Money to train one of your other employees to step into the key persons shoes. The company has enough money to cover the consequences of a fall in profit which reduces worry on the business owners as to where they will find the money to keep the business running smoothly. Avoids the need to borrow money to keep the business afloat something that may not be an option depending on the accounts or economic conditions. Staff morale remains positive knowing that the company is not in jeopardy. A little bit of cover is better than none If you find you can t afford all the protection you need today, don t worry. Many providers give you the flexibility to take out a small amount of cover now, which you can add to in the future. A small amount of protection is better than having no protection in place at all. 5
It s about you, not just your finances The Business Protection Options Cover What this provides Life Cover Money if you die or become terminally ill Critical Illness Cover Money if you are diagnosed with one of a list of defined critical illnesses Life or Critical Illness Cover Money if you die, become terminally ill or are diagnosed with a critical illness, whichever happens first Income Protection Key Person Income Protection A monthly income if the person covered is unable to work because of sickness or injury during the term of the cover A monthly income if the key person covered is unable to work because of sickness or injury during the term of the cover It s not just about the cover Many of the business protection providers provide more than just financial support. To provide extra peace of mind many offer additional services such as access to free health information helplines, nurse advisers to help you understand more about your illness, legal helplines and help in recruitment for replacement staff. Want to find out more? If you re considering taking out we d love to help. Our experienced staff can explain the difference between the different types of plans. And we can recommend the right type of cover for your business. Don t worry we know your time is precious so our discussions will be at times to suit you. We ll take care of all the paperwork and administration from start to finish. Call us on 0333 321 0060 or email our enquiry form to keyperson@businessoviso.co.uk 6