When you get into business, there are plenty of risks that come along. As a result, it is prudent that you get check out all the different forms of insurance to protect your company and income. While you probably know about contents insurance, can insurance and so on, we’ve listed another five types of businesses insurance policies out there that you should consider. We take a look at the main ones that maybe you haven’t thought about such as relevant life, key man insurance and shareholder protection along with indemnity.
Relevant Life Insurance
This insurance plan is great as a perk for employees is a small to medium size company. Like death in service, if an employee dies, a relevant life policy pays a lump sum of money to the family via a trust. Like discount life cover but placed on the company expenses. Terminal illness is normally included and you also have the option of transferring the policy to a new company or to a personal life insurance if you retire. However, most relevant life insurance policies do not cover for terminal illness if they occur in the last 12 months of the policy. It is also a good alternative for group life insurance because you can selectively choose the employees to be under the cover. Relevant life insurance is based on multiples of income and currently you can take up to 25 x your income depending on age. Premiums paid by the company are tax deductible so helps to get that corporation tax bill down too.
Key Man Insurance
In your business, you probably have one or two employee’s that you rely on heavily for most of the work or profits. Have you ever thought about what would happen to the business should that person die or become ill? No, most people haven’t which is why there is a huge gap in the amount of keyman insurance taken throughout the market. Key man or key person insurance is the perfect solution for such a scenario.
Key man insurance offers your business financial protection in the form of a lump sum of money in the event of death or critical illness of a key person. Covering your company against loss of profits, loss of revenue and or capital value of your business. It is more like a life insurance for the person, and it is ideal for an employer whose knowledge, work or contribution to the company is uniquely valuable to the business. With this insurance, you can offset hiring costs or losses until the right successor is identified. Its best to use a whole of market broker when looking for a keyman insurance quote as you get to compare all the UK providers for cover making sure you get the right product at the best price.
Shareholder Protection Insurance
Your business needs a safety net, and things can get difficult if one of the shareholders gets incapacitated or even dies. Issues will arise, and shareholder protection insurance handles that.
For the company, loss of a shareholder or director means you will probably need a new partner and you could also lose control of the business. Furthermore, it may not be easy to buy out the new shareholder. This insurance eliminates all this because the money received can be used to buy back his or her shares and cancel them or even keep them as treasury shares. Shareholder protection insurance can also save your business from nasty succession wars. Along with the insurance companies will normally set up a cross option agreement which forces the money to be used to buy the shares from the deceased estate.
Mistakes and accidents s happen in business, and some could be so costly that they leave the business on its deathbed. If a client or any other person decides to sue you for services that were not provided as agreed, you can avoid hefty legal fees through the professional indemnity insurance.
No matter how many years your business may have been running, mistakes happen, and when they do, you need indemnity insurance. Some of the scenarios this type of insurance cover can take care of include loss of data, professional negligence, defamation, loss of money or goods and unintentional breach of confidentiality or copyright. Therefore, as your business continue providing services to your clients, make sure unforeseen legal battles do not make you close down.
Business Loan Insurance
To grow your business, you need financial assistance from a bank in the form of a loan. As you are taking the loan, it is your belief that the business will be able to repay it as it continues growing and making profits. Unfortunately, this is not always the case. The unexpected can happen and make it impossible to repay the loan meaning that you could lose the security that was used to get the loan. Luckily, with business loan insurance, you will not have to worry about losing anything.
This insurance cover can help you offset an existing loan or cover loan repayments for a certain period until you get back on your feet again. There are two ways to purchase loan protection insurance cover. First, you could go for it as soon as your loan is approved. Alternatively, you can take it up any time after you have received the loan so that it takes care of the existing balance should a tragedy befall you.
There is a lot that can change the dynamic and position of your business. Regardless of how well it may be doing, it is important that you have all potential areas where you could lose money covered and going for the above insurance types can guarantee you that. The government share a lot of information on business loans for star ups which you can read here.
So where do I find this kind of insurance?
There are plenty of provider of these types of insurance but of course you want to try and make sure you are getting the right policy for your company and of course at the best price. Whole of market brokers or key man insurance specialists are often where you will get the best deal. You can of course go direct to the providers but of course they will only have the option of advising on their own products. We found it best to use specialists in key man insurance as the better option as they tend to be more geared to offer the right type of advise. Many of the providers will have variations on the contract, so its best to get advise from a broker on things like critical illness and variations on small print.