Key Person Insurance

Most businesses insure their main assets such as the buildings, cars and machinery that the business uses. However many fail to insure their most important resource of all. The people who provide key skills, key contacts or who provide the knowledge and experience required to contribute to the profit of a business are often not insured. Key person insurance would provide your business with a cash injection to help it deal with the loss of profit that would occur through the death or critical illness of a key person. This area of insurance is quite technical the trust forms, taxation rules and levels of cover required need an adviser of considerable experience and knowledge. For this reason you will deal with a fully qualified financial adviser who has the necessary qualifications to offer you a professional service.

Business Loan Protection

If a business where to lose a shareholder, any many cases the banks that have loaned money to you in the past may start asking for the repayment of loans and over drafts. They tend to get edgy as in times when a company loses a shareholder the company may also experience a significant loss of profits. Business loan insurance is therefore quite simple as the sum assured should match the debt owed on the loan and the life insurance term should match the loan term. When businesses do borrow perhaps from their business bank or other commercial lender, in many cases the providers will offer business loan protection. However the premiums that these providers charge are in many cases much more than that of which a specialist life insurance provider will charge. For this reason even if you have taken the responsible steps of taking loan protection insurance you may find that you are overpaying.

Shareholder Business Protection

If a business were to lose a shareholder the affects on a business can be severe. The shareholders spouse will normally inherit the shares. This can lead to problems as the business doesn’t usually have enough cash to buy back the shares. This can result in the spouse selling the shares to a competitor or wanting to become involved in the business. In addition to this the business will normally drop in value as suppliers and customers get worried about the loss of the shareholder. This can result in the spouse having to sell the shares to a competitor at a price much less than previously available. In order to ensure the spouse receives a fair price for the shares and to ensure the business has funds to buy the shares shareholder protection insurance is taken out on all the shareholders. The policies are written in trust to the other shareholders and the sum assured paid to them to buy the shares from the remaining spouse if a claim is made. A cross option agreement is drawn up to ensure the rights of both parties.