Ensure the financial stability of your business in the event of a key shareholder, director or employee’s death or serious illness.
Business protection is an important consideration, providing an effective solution to a potentially difficult set of circumstances.
We can advise on Business and Key Person protection, ensuring you have the necessary funds to recruit and retain a replacement, or replace lost profit, should you lose a key member of your team.
Likewise, we can offer advice on Shareholder and Partnership Protection, which can be put in place to prevent business wind up or the sale of shares to other parties, settle outstanding loans and allow the remaining Partners or Directors to keep control of the business.
Business Insurance includes four types of cover, Keyman, Director Share Protection, Director Loan and Relevant Life. Whilst you may cover prospective loss of the physical items of your business, you also need to consider the people that make up your business.
Why cover a Keyperson – A Keyman is someone whose absence would be financially detrimental to your business. You can cover this person in a number of ways for Life Assurance, Critical Illness or Income Protection. The benefit is paid to your business and is set at a level to reflect the missed income.
Tax – Depending on the status of the keyman and the reason for the cover, there a various different ways which this can be treated for tax. Tax relief may be available on premiums.
How can we help – using our knowledge, we can guide you through the process, help with the calculations and source the best terms for you. We can also help you to understand the tax treatment of premiums and claims proceeds.
Director Share Protection
Why have Director Share Protection – If a shareholder were to die or be terminally ill, what would happen to their shares, do you have the correct agreement in place, how would you pay for the shares?
Tax – if the policy is in trust the proceeds will be paid tax free.
How can we support you – we can help with the shareholder agreement, policy and the trust, as well as sourcing the best terms for cover and remind you when to renew.
Director Loan Protection
Director Loan Protection – if you have made an investment in the form of a loan into your company, on death this loan is repayable to your estate. You can take out a policy to cover this cost so it does not impact your business.
Tax – premiums do not attract tax relief.
How can we help – cover applies differently if you are a partnership or sole trader we can support you with how best to cover your loan.
Relevant Life Policies
Relevant Life Policies – are individual plans which apply to employees, directors and salaried partners as opposed to a group of employees. It pays out on death and can be extended to cover on a terminal illness diagnosis. The policy is paid by the employer, can have high multiples of salary, the benefit is not subject to Inheritance tax, or Lifetime Allowance and the premiums do not count towards the members Annual Allowance.
Tax – the premium is deductible against corporation tax and not a benefit in kind.
How can we support you – we can source the best policy and terms from the market to suit your needs and support you with the trust arrangements.
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