Most businesses insure the van, the premises and the laptops. Very few insure the people who make the money.
If your business partner dies, their shares go to their family. Do you want them as your new business partner, and do they even want to be there?
Lose the person your profits depend on and the phones go quiet, just when the bills keep coming.
Business loans don’t die with you, and a personal guarantee can turn a business debt into a family debt.
Serious illness is a bigger risk during your working life than most people think. Who keeps your wages coming?
Business protection isn’t one policy. Most businesses need two or three of these, and the guide explains each one properly.
The money and the agreement for the other shareholders to buy a shareholder’s shares if they die or are seriously ill.
The same idea for partnerships and LLPs, so the firm carries on and the partner’s family is paid fairly.
Pays the business if someone it depends on dies or is seriously ill, to protect profits while you recover.
Clears business loans and personal guarantees, so the debt is paid off rather than passed on.
Life cover for directors and employees, paid for by the company, paying out to your family.
Helps the company keep paying your salary if illness or injury stops you working.
Free download · 26 pages
Short chapters, a picture for each one and the one thing to remember. Read it with a coffee, then share it with your business partner.
The guide opens in a new tab, where you can read it or save it to your device.
Your will is still important, but it works alongside a business agreement, not instead of one. A cross-option or partnership agreement, drawn up by a solicitor, says what happens to the shares. The cover provides the money to pay for them.
Key person cover can be an allowable expense if it meets HMRC’s tests, but the payout is then usually taxed. Relevant life and executive income protection premiums are usually allowable. Shareholder protection and loan protection premiums usually aren’t. The guide has a full table, and your accountant should confirm the treatment before a policy starts.
As a sole trader, you and the business are the same thing in law, so the business can’t really insure you as its key person. Personal life cover in trust can clear business debts, critical illness cover gives you a lump sum to keep going, and income protection replaces your income if you can’t work. You can still take key person cover on an employee you rely on.
We start by working out what the business is worth, who your key people are and what you owe. Then we search the market and show you the numbers, so you can decide what’s right. Cover is based on your health when you apply, so it’s easiest while everyone is fit and well.
Pick a time that suits you and we’ll call you then. Bring your accounts and your biggest worry. We’ll bring the coffee.
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The legal bit
This page and the guide are for general information only and are not personal advice.
We don’t give legal or tax advice. Shareholder and partnership agreements should be drawn up by a solicitor.
Will writing is not regulated by the Financial Conduct Authority.