Understanding Business Protection for SMEs
In 2019, there were almost 6 million businesses in the UK. Around 5.82 million of these were small businesses with under 50 employees, while around 36,000 were medium businesses with between 50-250 employees. Compared to the previous year, this is an increase of 3.5%.
SMEs are central to the country’s economy; they account for 99.9% of the UK’s business population. For reasons like this, it is important that SMEs have the right business protection in place. You may already have vehicle or property insurance, but what about business protection that covers staff or owners?
It is crucial to think about what would happen to your business if a key employee was to pass away, or if a shareholder was to suffer a critical illness and had to step down. The impact could be devastating, but if you have the right protection in place, it could ensure the succession of the business.
Finding the right solution
The right business protection cover could protect your small business from a variety of issues. While some aspects of business insurance are legally required, there are others that are not but you should still consider. A small business could benefit from life insurance in many different ways, including planning for the future and protecting your best assets.
Key person insurance, relevant life insurance and shareholder protection are all popular types of cover that may benefit SMEs. These policies can protect your family or your business and may remove any further uncertainty during a difficult time.
Plan for the future
Life insurance for SMEs can help to create a succession plan for the business. If something was to happen to the business owner or another important figure, there could be a huge financial impact on the business.
By having business life insurance in place, it could ensure the business is prepared for any eventuality. For instance, if a shareholder was to pass away, Shareholder Protection could provide the capital to help other shareholders to buy back the shares for the benefit of the business.
Protect your assets
It is the staff that really make a business what it is; their knowledge, skill and experience is what keeps a business profitable. Whether it is the CEO or a junior member of the team, if there are people within your SME that are hard to replace, consider protecting the business by putting the right cover in place.
As a small to medium business, there is no doubt that you depend on a few key figures to deliver important aspects of the business. Without them, the business may suffer. Key Person Insurance is a policy paid for by the business, and can provide financial support at a time the business may suffer from a loss of profits or have to spend significant time and resource searching for a suitable replacement.
Improve employee retention
In some cases, offering business life insurance as an employee benefit can have a positive impact on your business, including staff retention. This could be important for SMEs who want to provide the right incentives for their employees. It may also help to attract the right staff to the the business.
Relevant Life Insurance is taken out and paid for by the business and provides an individual death-in-service policy to its employees. It is designed to pay out a lump sum to the family if the employee was to pass away.
If you are part of an SME and would like to know more about the different policies available to you, get in touch with the team today.