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Financial Planning

Business Insurance

Having the right business insurance in place means protecting your business and ultimately yours and your family’s financial security. You may have a key employee whose death or illness would adversely impact the profits of your company, for example. Perhaps there is another business owner involved and you want to ensure that their death does not mean their spouse or children end up owning part of the business. Whatever you need, it is important to get advice to ensure the right insurances are place to allow your business to continue running smoothly.

Why use Kirk Rice for business insurance?

Times of need call for personal guidance and service. And this means focusing on yours and your business’s requirements both now and in the future.

Our advisers will guide you towards making the right decisions for you and your business. This includes minimising tax liabilities (perhaps through using a trust or cross option agreement) and making sure the right person is being paid at the right time. We are also on hand to help navigate the often complex world of making a claim.

Kirk Rice is not tied to the products of a particular provider either. We act independently and on your behalf, which means we can and will research any product in the marketplace. It also means we have inside out knowledge of the protection and insurance market. So we are well-placed to find the insurer that matches your precise needs. For example, those with existing medical conditions might still be able to get insurance – but getting the right knowledge is crucial in such instances.

Business insurance isn’t just about finances

Making decisions about business insurance is about much more than just finances. There are all sorts of considerations and consequences to the protection you have in place. This makes finding the right insurer crucial.

In the case of a serious illness diagnosis or a death, some insurers provide support to dependents before or after a claim. After a diagnosis some insurers also extend support services to you and your dependents. This can help a family adapt to life after a serious illness, or help children deal with the loss of a parent.

As a business owner you will likely be interested in using an insurer that:

helps you return to work effectively after an illness
helps you find temporary people with the key skills that would otherwise be absent when a key employee is unable to work

Insurance for business owners

As a small business owner there are many things you have to think about when considering protection. Here are just a few:

  •  Would your business be able to repay your director’s loan account on your death? And how would this affect your family
  • Have lenders backed you personally? Will they claim on your family after your death?
  • Could paying for life assurance through your company be more tax efficient?
  • As a co-owner of a business, what agreement do you have to retain control of your firm after the death or illness of another shareholder?
  • Are your company profits, your children’s education or your family lifestyle heavily reliant upon you or an employee?

Kirk Rice will guide you through the different aspects of protecting your business and help you find the right product to suit your needs.

The three main types of business insurance products

Covering your business’s liabilities

When you are considering protecting your business, its liabilities are the most logical place to start. Failing to cover certain liabilities could well lead to the failure of any business – and crucially the loss of financial security of its owner and their family. For example, should a key owner or staff member die, the right business insurance can be used to repay a loan that might otherwise cripple a business.

Key person cover

It’s easy to assume that the key people in any business are the directors. Yet this is not always true. In fact, a key person can include anyone whose absence would seriously impact a business’s ability to continue to operate and make profit. Kirk Rice can help you identify and then protect your business against key personnel risk, looking at:

Identifying key people and the skills and the relationships they bring to your business
Working out the best way to value their contribution and then assess the potential revenue loss should something happen to them
Assessing what it would cost to replace a key person

Shareholder and partnership protection

Does your businesses have a plan in the event of the death of its owner? Or a plan in place should the owner be unable to work (say through disability or critical illness)?

This is where business succession planning comes in – to protect a business’s shareholders/partners and their families, as well as the business and its employees. This is usually done by transferring shares at the point of death or illness. The main options include:

Automatic accrual

This means that following the death of a shareholder, their share will automatically be redistributed among remaining shareholders. This can include the stipulation of a specific split of shares. And a separate life policy is set up for the deceased shareholder’s family.

A double option agreement

A double option agreement is commonly used when various options are laid out with a specific time period in mind. For example, it could be stipulated that a company has the right to buy the deceased shareholder’s shares and go through with a sale within 60 days of their death. Or the family could well be given the right to buy the company.

A buy-back agreement

This is like a double option agreement, but a buy-back agreement usually stipulates that the deceased’s shares must be sold by the family. In this instance, a separate life policy is set up for the deceased shareholder’s family.

Whatever you need to protect your business against, Kirk Rice will guide you through the numerous options and plans available. We will research and recommend the most appropriate product and provider and assist fully with the application process.

A no-obligation meeting

To start out we offer you a no cost, no-obligation meeting with one of our financial professionals. They will go through your protection needs with you – as everybody’s circumstances differ – and this will enable us to talk to you more specifically about how we can help.

Insuring Your Business factsheet

 


 

Kirk Rice LLP is authorised and regulated by the Financial Conduct Authority (www.fca.org.uk/register). FCA Registration No: 531538.

Kirk Rice LLP is a limited liability partnership registered in England & Wales (Registered Number: OC354936) and having its registered office at The Courtyard, High Street, Ascot, Berkshire, SL5 7HP.