As the name suggests, business loan protection is a type of insurance policy that is designed to pay off part of or all, of a business’ debts should a key employee die or suffer from a critical illness. Currently, a study has found that 65% of British SMEs have some form of business debt, with the average borrowing being £176,000, and being unable to repay these loans can turn into a serious issue quickly.
Business loan protection insurance can help you repay the loans, including but not limited to:
- Commercial loans and mortgages
- Venture capital loans
- Directors’ loans
- Personal guarantees
Business loan protection combines critical illness cover and life insurance to protect against death or serious illness. It is taken out on the life of a key person within your business, and if unfortunately, a time comes and you need to make a claim, a lump sum would be paid to help the business repay its debt. This type of cover can be taken out for numerous people within the business.
This year it was reported that 53% of small and medium sized businesses in Britain would need to close if they lost one of their most important workers. New companies and sole traders are the most vulnerable, with 67% and 73% respectively stating that they would last less than a year. Considering this, it is vital that businesses insure themselves against these situations and financially protect themselves for the future and the unknown.
If you would like to safeguard your business against personal adversities via financial products, contact one of our expert financial advisers today. They will be able to provide you with clear information and advise you on the best insurance products and policies for your business. Call us on 01639 262222 or click here to send us an email.