The Protection Gaps Most Business Owners Have

Business owners are generally well insured against the things that would damage the business, and poorly insured against the things that would end it.

The four gaps we see most often

• Income protection — if illness stopped you working for a year, what would the household live on? For many owners the honest answer is savings, then the business, then nothing.

• Key person cover — the business loses its most productive person, and the debt, the clients and the payroll all remain.

• Shareholder or partnership protection — a co-owner dies and their shares pass to a family member with no involvement in the business, and no shared view of its future.

• Family protection that has not been reviewed since the mortgage was smaller and the children were younger.

Relevant life cover

A frequently overlooked option: a death-in-service style policy for an individual director, generally paid for by the company and typically treated as an allowable business expense, without counting towards pension allowances. Many owner-directors have never had it explained to them.

Why it gets deferred

Protection is the least enjoyable financial conversation there is. It is also the one where the consequence of getting it wrong falls entirely on the people you were trying to look after.

If nobody has run these numbers for your company, that's exactly what we do. Book a free, no-obligation call at www.dmfinancialplanning.co.uk.

Important information

This article is for general information only and does not constitute personal financial advice. The value of investments can fall as well as rise and you may get back less than you invest. Tax treatment depends on individual circumstances and may change. A pension is a long-term investment; funds cannot normally be accessed until age 55 (57 from 2028). DM Financial Planning is a trading style of Aegis Financial Planning Limited, authorised and regulated by the Financial Conduct Authority (FCA No. 624298).