11 Jan 2018
Only a quarter of small and medium sized enterprises in Britain have insurance covering the key people in their business.
Royal London says it is worrying that more than half of senior decision makers in British SMEs who have heard of this type of insurance still don't think it is important to have a policy.
The mutual life insurer says this could be driven by lack of awareness, despite three out of ten of all small and medium sized enterprises having experienced the loss of a key employee for three months or more due to a serious illness.
Of those SMEs aware of various types of insurance cover, 65% believe it is important to insure their business premises and 62% their stock and equipment. Yet Royal London says only 26% actually have a policy to protect a key person. This provides a lump-sum payment if a key employee suffers a critical illness or dies.
The insurer says smaller firms would face the biggest impact if they lost a key employee, but 57% of businesses with less than 50 employees who are aware of key person insurance don’t think it is important.
Larger companies with up to 250 staff are more likely to have experienced the loss of a key employee to serious illness or death, and nearly half have taken out a policy.
Royal London says there is a need for senior decision makers in British SMEs to speak to a financial adviser to find out whether their business could benefit from the peace of mind that business protection insurance can offer.
Ian Smart, of Royal London, said: "People are the most valuable asset of any business, but SMEs are more likely to insure their premises and stock than their key people. With a record 5.7million SMEs in the UK, a lot of businesses are leaving their future exposed to loss of a key employee through serious injury, illness or death."
We can help you identify who your key people are and how much insurance you need.
Our advisers then find solutions for you and compare the costs, we will help you find a policy that fits your budget and addresses your business short-term cash needs in case of tragedy. Call us on 0333 00 44 333 or click here.