Running a business is hard, regardless of its size. The key personnel that drive a business forward become the backbone of its success, so most organisations have given plenty of time and thought to the pay and benefits offered to recruit and retain these employees. But, is this level of provision enough?
Whilst the above may suffice for large corporate organisations, the majority of UK business exists in the small to medium enterprise space, so a good employee benefit package may not be enough.
Protection and provision for the employee is important, but this should go hand in hand with the same care and attention for the business. The purpose of business protection is to ensure that in the event of the loss of a key person, the business and remaining personnel are able to continue, ensuring that the business continues to progress, regardless of the challenges endured.
The business protection needs of each organisation will vary depending upon the consequences of a key person being removed from the business. The assistance required may be in the form of the provision of assets for the business to purchase shares, settle debts, cover recruitment costs, or guidance to help restructure business income expectations following the loss of key person revenue. Security for all of these business requirements can be satisfied by various group risk and protection products.
Two of the strongest solutions for business protection are Keyman and Shareholder Protection cover. Keyman cover can provide a lump sum to the business to deal with the general costs arising from the loss of a key member of a business. Shareholder Protection cover can provide money to the remaining partners of a business so that they can buy the shares of a partner who dies or is diagnosed with a terminal illness. Shareholder protection allows the remaining partners to remain in control of the business.
It is worth taking the time to assess and understand the breadth and depth of business protection required, so that an appropriate level of cover can be put in place. Equally important is a regular review of the provision already in place, to ensure that the cover established remains adequate and continues to cover the correct key people.
It is likely that this part of running a business is the part that no one wants to deal with, so it can easily become overlooked. However, ignoring this area may result in the decline of more than just one key person. Preparing for the worst won’t stop it from happening, but it will help those left behind deal with any aftermath in a controlled manner, and help to ensure that the business continues to progress with minimal disruption.
Protecting the survival of a business is also a tick in the box of due diligence for any potential business partners. It shows that you are as serious about your business as you are about theirs.
Contact Quantum Advisory for more details regarding protecting your business.
Pauline Iles – Senior Risk Benefits Consultant