Have you insured the most important part of your business?

By Matthew Beck, Smith & Pinching
Running a business can be very rewarding but comes with many responsibilities and risks. Your business not only provides an income for you personally, but also financial security for your family and workforce.
Published in Suffolk Director magazine, Summer|Autumn 2022

Financial Planning: Smith & Pinching

Unforeseen events can therefore have a serious impact, causing additional financial strain, or even risking the business’s future. So, have you put steps in place to protect what is arguably the most important part of your business, you and your key members of staff?

Fortunately, there are a range of business protection policies available that can, not only provide peace of mind that your business will be able to continue to run and that it remains in control of the right people, but will also ensure your family’s financial future is secure.

Business protection policies include:

Key Person Protection

Key person cover provides your business with a lump sum or regular income, should a key member of staff (or director) pass away, or be unwell and unable to work. It provides a backup plan that allows your business to continue to run, providing funds to recruit new staff, cover wages or any other expense that arises due to this unforeseen event.

“67% of new businesses think they would cease to trade immediately should the business owner be unable to work”
Legal & General

Shareholder/Partnership Protection

For those running businesses with another director or partner, have you thought what may happen should one of you pass away, or be critically ill? Does the business have a plan, or Business Will, in place for how the shares would be purchased, and for how much? Losing a business partner is tough enough, without having to worry about the financials of purchasing their shares, or dealing with a family member who may not know anything about your business. Shareholder and partnership protection provides the surviving/continuing business partner with a lump sum, so that they can purchase the shares at a fair value and maintain control of the business. This provides certainty for the business and your family.

Relevant Life Cover 

Relevant life is a type of life cover available for owners and employees of limited companies. It is an attractive option as the premiums are paid by the business, saving personal tax and corporation tax for the business. The policy can also be set up in trust, to help the overall tax efficiency of the estate of the person who’s covered. This is a smart and cost-effective way to provide life cover for yourself and your key members of staff.

Each policy has its own place within a business, and what could be right for one company may not be for another, so we would recommend always seeking professional financial advice when setting up these policies. We have an experienced team at Smith & Pinching who work closely with business owners and their professional partners, to provide clarity and peace of mind, that your business is protected and on course to building you a financially secure future.

Smith & Pinching is authorised and regulated by the Financial Conduct Authority. Contact us today for an informal discussion about your business and its goals. We can assist businesses of all sizes make the right financial decisions.

Have you insured the most important part of your business? 1

Matthew Beck is a Chartered Financial Planner at Smith & Pinching

T: 01502 515383
E: beckm@smith-pinching.co.uk
W: www.smith-pinching.co.uk
LI: www.linkedin.com/inmatthew-beckifa/

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