Businesses can choose from a wide range of business insurance policies designed to meet their specific needs and goals. Common types of policies include general liability insurance, workers' compensation insurance, professional liability insurance (such as errors & omissions coverage), product liability coverage, commercial property coverage, Relevant Life, Keyman, Shareholder Protection, Executive Income Protection, Relevant Life, Keyman, Shareholder Protection, Executive Income Protection and business interruption coverage. Each type has its own unique benefits and limitations and should be carefully evaluated by a financial adviser before purchasing so that the right policy is chosen for the business's specific needs.
The simplest way to think of this is in the same way you would standard income protection - it will provide an income to the Executive in the event of being unable to work due to accident or ill health. However, business owners are able to cover more of their salary, dividends and bonuses too as well as covering National Insurance & Pension Contribution up to certain levels.
You can set up the policy to have deferred period that suits the policy holder with the longer deferment periods generally making the premiums cheaper.
Directors of businesses have the ability to arrange life cover via their business with the premiums qualifying as a business expense.
Directors will normally arrange the cover as a form of death in service or even to cover any debts or liabilities they may have.
This form of insurance is designed to provide cover for key people who work within the business - The kind of people that make a fundamental difference. If your business could suffer by losing a key person than this insurance could be useful. Key people can range from the admin team, sales team or management and cover can be arranged based on an individual's salary or a multiple of the profit that they bring in.
This form of insurance is popular when there is more than 1 business owner/ shareholder. An example would be 2 friends that go into business together and one of the friends passes away. Their widow doesn’t want anything to do with the business, and the surviving shareholder doesn’t have the funds to buy them out.
With this type of cover in place, it can mean the remaining shareholder has the ability to purchase the deceased share within the business.
Similar to when an individual's arranges life insurance to cover a mortgage. The difference is, this policy is designed to cover any debts and liabilities the business may have.
