Will your business continue if the worst happens?

The new Aviva ad on TV, featuring Paul Whitehouse, is one of the most talked about for years. A quick look on YouTube will show very mixed views – many think the ad is distasteful or upsetting but many others say it really hits home about the financial suffering that can easily be avoided in the event of the loss of a loved one. Shocking it may be, but suffering financially as well as emotionally is even more of a shock and the same applies just as much in business life as well as family life.

More than four in 10 business owners think their companies would fold within a year if a key employee were to die or contract a critical illness, research suggests. The study from Legal & General found some two-fifths (44%) of those surveyed fear they would struggle to keep their business if they lost a vital employee.

However, according to the same survey, only 4% of business owners have shareholder protection in place and one in two (48%) does not have any formal agreement about what would happen on the death of a business owner. This is despite the fact that a decent arrangement would provide the peace of mind that the business could survive should the worst happen to a key employee. The research also found that half of the businesses surveyed have corporate debts, yet just 46% of those had life or critical illness policies in place to cover the money owed. Indeed, overall, the research estimated there is a debt gap of almost £300bn, a shareholder protection gap of more than £400bn and a key person protection gap of more than £400bn - adding up to a total business protection gap of £1.1 trillion!

The survey is the first time in four years any organisation has published an update to Swiss Re’s previous, widely cited research which reached a similar conclusion. It is therefore something every business owner should start to consider. Without protection, they run the risk that their company could fail - or, worse perhaps, see shares fall into the wrong hands.

Our Corporate Protection expert, Kelly Pardoe, will be happy to help you identify any cover needed and provide solutions. Contact her on 0114 2802830 or kellypardoe@ecsbrokers.com