Preparation is key, and while we all hope the worst won’t happen to us, it doesn’t mean it won’t. Preparing for adversity means you are providing a financial safety net for your business in case the “what ifs” happen. One way to prepare is with key person insurance.
In 2016, there were 5.5 million registered private businesses in the UK. Of these, 5.3 million (96%) were micro-businesses which employ under 10 employees – and of these micro-businesses 4.2 million (76%) had one employee, the owner. That is a huge number of UK businesses which are solely dependent on one person or a limited number of people, so what happens when the owner or a key employee must take an extended amount of leave?
Research has found that 40% of businesses would cease trading within a year of losing a key person – but despite this worrying statistic and the number of micro-businesses operating in the UK, 60% do not have any business protection insurance in place. They are exposing themselves, their families and employees to financial uncertainty due to illness, injury or even death through a lack of risk planning and preparation.
Nobody can predict the future but key person insurance, and similar financial products, gives you the power to future-proof your business. It provides a financial crutch to get you through a difficult period that could otherwise result in your business reaching the end of its journey. Whether you use it to find the talent to fill the void of the key person, or as breathing space so the day-to-day operations have full focus, it can keep your business afloat.
To discuss key person insurance further and find out what it could offer your business, please don’t hesitate in contacting us. Call us on 01639 262222 or click here to send us an email.