Business Protection
Business protection covers the financial risks a company faces if a director, owner, or key employee dies or becomes seriously ill — from losing the person who drives the revenue, to a surviving business partner needing to buy out a deceased shareholder's stake. It's a group of related policies rather than one product, and which ones you need depends on how your business is structured.
Get a no-obligation quoteWhat it actually is
Three problems, three types of cover
Relevant life plans are a tax-efficient way for a company to provide life cover for an individual director or employee, often instead of them paying for personal life insurance out of taxed income. Tax treatment depends on your individual circumstances and may change in the future. Key person cover pays the business a lump sum if someone whose skills, contacts, or leadership are critical to it dies or is diagnosed with a critical illness, giving the company money to cover lost profit or the cost of replacing them. Shareholder protection, sometimes called partnership or business partner protection, provides the funds for surviving owners to buy a deceased owner's share of the business from their family, so control stays with the people running it and the family gets a fair value in cash rather than an ongoing stake in a company they don't run.
Who needs it
This is probably for you if…
- You're a director or owner and would benefit from the company paying for cover rather than you personally
- Your business depends heavily on one or two key people whose loss would hit profits or operations hard
- You co-own the business with others and don't currently have an agreed way to fund a buyout if one of you died
- You want cover set up efficiently through the company rather than out of your own taxed income
- You've never reviewed what would actually happen to the business, financially, if you or a co-owner weren't there tomorrow
Sound like you?
If any of that struck a chord, the next step is a short conversation. I'll tell you honestly whether business protection is what you need, and what it'd cost to arrange.
What it costs
What affects the cost
Cost depends on who's being covered — their age, health, and role — how much cover the business needs, and which type of policy (relevant life, key person, or shareholder protection) you're arranging. Key person and shareholder protection amounts are usually based on a business valuation or the financial impact of losing that person, so the right starting point is working out what the business would actually need, not picking a number. I'll help you think through that before we look at cover.
See what drives the price of business protection→I compare cover from leading UK insurers.
- Vitality
- Scottish Widows
- Zurich
- Legal & General
- Aviva
- Guardian
- MetLife
- The Exeter
- LV=
- Royal London
Questions people ask
Straight answers, no jargon.
What is a relevant life plan?
It's a life insurance policy that a company sets up and pays for on behalf of a director or employee, written in trust for that person's family. It's typically a tax-efficient way to provide life cover — premiums are usually treated as an allowable business expense and, done correctly, the cover doesn't count as a taxable benefit to the individual. Tax treatment depends on your individual circumstances and may change in the future.
What is key person insurance and who counts as a key person?
It's cover the business takes out on someone whose contribution is critical to it, often a founder, a top salesperson, or someone with specialist knowledge that would be hard to replace quickly. If that person died or was diagnosed with a serious illness, the business receives a lump sum to cover lost profit, recruitment costs, or repaying finance they'd personally guaranteed.
What is shareholder protection and why do I need it?
If you co-own a business and one owner dies, their share of the business typically passes to their estate — which could mean their family unexpectedly becomes your business partner, or wants to sell a stake you can't easily afford to buy. Shareholder protection provides the money for the surviving owners to buy that share, usually alongside a legal agreement setting out that this is what happens, so both sides know where they stand in advance.
Can the company really pay for my life insurance?
In some circumstances, yes — relevant life plans exist specifically for this, and the premiums are usually paid by the company rather than by you personally. Whether it's the right structure for you depends on your role, how the company is set up, and your personal tax position, so it's worth talking through your specific situation rather than assuming it applies. Tax treatment depends on your individual circumstances and may change in the future.
How much key person or shareholder cover does my business actually need?
It depends on what you're protecting against — replacing lost profit, covering a business loan that person guaranteed, or funding a share buyout at a fair valuation. There's no standard formula, so I'll work through the numbers with you, and your accountant if needed, rather than suggesting a generic multiple of salary.
How do you get paid, and do you compare more than one insurer for business cover?
My advice costs you nothing. My commission is funded by the insurer if you decide to go ahead with a policy, and it doesn't change what you pay. I compare cover from leading UK insurers.
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Two minutes now. I'll come back to you within one working day with a straight answer on what you need and what it’s likely to cost.