Business protection

All businesses face a raft of challenges, whether it’s new competitors entering the market, the bank manager not providing sufficient credit, or new government regulations to contend with. When it comes to SMEs, most will recognise that people are not only their biggest asset, but also the biggest area of risk for a firm. It is therefore crucial that firms identify these risks and take steps to either remove or reduce them by taking out a business protection insurance policy.

The tax treatment depends on the kind of policy being offered, with most employee benefits being taxable as a benefit in kind. Some policies can also provide tax efficient means of covering the lives of key staff. Contact us today and speak to one of our employee benefits consultants to find out more.

An employer should consider a relevant life policy (RLP) if they wish to provide tax-efficient benefits on the death in service of one or more employees, but do not wish to set up a group arrangement. An employer can also receive tax relief on premium payments under an RLP

 based on our understanding of the current law and HM Revenue and Customs practice

Our business protection insurance advisers can help you to identify and understand the risk posed by the loss of a key employee within your business. To help with this, you could consider the impact of certain employees on the profitability of the business. What effect would their absence have on creditors, customers and clients, as well as competitors?

Given the greater awareness of retention and liability/fraud risks, firms are generally quite good at reducing the impact of and managing risks. SMEs make up approximately 99% of the businesses in the UK. These businesses tend to be reliant on a few key people that really help drive the business and so the temporary or permanent absence of a valuable member of staff can have a significant impact on the continuity of your business.

A key person is any member of staff who is critical to your business and whose role has a big impact on your company’s profits. They could be a business owner, director, salesperson, or any employee with specialist skills or knowledge.

You already protect many of the important elements that keep your business running smoothly, like property, fleets, and stock. Protecting key people is no different. It simply makes sense to insure all your most valuable assets, including your key staff and business owners.

70% of small businesses think they would cease trading in less than two years after losing a key person.

Losing a key person can have a detrimental impact on the long-term survival of a business. Their loss could leave the business without skills and knowledge, and expose your business to the following:

• Customers going elsewhere

• Steep recruitment costs (including paying for a temporary replacement)

• Loss of sales
  Loans being called in
  Debt (75% of SMEs are in some form of debt)

• Suppliers demanding immediate payment

Group risk policies don’t just provide eventual benefits – they’re useful to employees in the day-to-day, too, with features like employee assistance programmes (EAPs) which host confidential counselling 365 days of the year, and virtual GPs that allow employees to be prescribed medication, where necessary, and see a doctor from the comfort of their own home – and more.