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Business Insurance

What are the risks of business management?

Todays demanding business environment requires all prudent business owners to be familiar with the risks they run simply by being in business. For example the death, disability or critical illness of an owner, or key person, can cause serious disruption to a business and it’s financial stability.

Our process involves an in-depth analysis, which will help identify the risk factors specific to your business. Our report back to you will include recommendations, which can then be modified in line with your priorities and requirements. Once your Risk Management Programme has been implemented regular reviews are necessary.

Core areas of Business Risk Management are:

Maintaining Business Value/Continuity
What happens on the death, disablement or major health trauma of the business owner? Is there loss of business momentum? Does the business survive? Lenders can impose credit restrictions and goodwill can be lost.

Debt Protection
Who pays off or funds business debt if the owner or key person is removed through death or disability? Lenders consider the individuals skills and the businesses viability along with security provided when approving loans or credit lines. Take one away and debt (loans, credit lines or overdrafts) can be called up or frozen.

Personal Guarantees & Contingent Liabilities
Personal guarantees are often required by lease agreements, overdraft borrowing’s, hire purchase agreements and business creditors. Contingent liabilities are potential future liabilities which may become payable under some contract clauses.

Property/Liability Covers
People in business in todays environment are susceptible to and responsible for all sorts of liability claims being made against them. Company Directors, Professional Consultants and any business owner or operator, all need good liability programmes that will protect them in the event of a claim being made against them that they are legally responsible for.

Business Assets Insurance covers most types of tangible property such as buildings, plant, stock and other property against accidental loss or destruction that is unexpected.

Loss of Key Person
The death, disability or critical illness of a business owner or key employee can cause serious disruption to business stability. Bankers and Trade Creditors can base lending on key individuals and loss of these people could result in credit lines being called up and restricted trade credit, affecting business solvency. Key people may include Business Founder, Key Directors, Sales Manager, Financial Controller, Research and Development Specialists.

A forced business sale could result in a fire sale price for a lifetime’s work.

Shareholder/Partner and Buy/Sell Agreements
A Buy/Sell Agreement is designed to protect shareholders and partners to enable continuity of business ownership. It is normally used in small to medium size companies where the shareholders want control over ownership issues. The agreement sets out the events that could trigger the Buy/Sell (ie. premature death, disablement, trauma and retirement), the time frames involved in share transfer/sale and a system to enable share valuation. A funded Buy/Sell Agreement aims to have insurance proceeds made available at the correct time for the remaining shareholders to trigger a compulsory purchase of shares. This protects both the remaining shareholders business assets and those of the existing shareholder.

Succession Planning
A plan to enable the business or farm owner an orderly sale or exit, maximising asset values and financial certainty. Enables transfer of family assets across generations. It can involve the use of Family Trusts, an orderly gifting programme and investment diversification.

Succession Planning preserves lifestyle choices in retirement.

Employee Benefits
Employee benefits are designed to retain skilled staff and reward long-term service and loyalty, enhancing productivity. This will result in lower staff turn over and is perceived by staff to be a valuable tangible benefit. An attractive employee benefit can often attract experienced staff that might otherwise go elsewhere.

Talk to us today to find the insurance that best fits your business requirements.

“If I had my way I would write the word “insure” over every door of every cottage and upon the blotting book of every public man, because I am convinced that, for sacrifices that are inconceivably small, families can be secured against catastrophes which otherwise would smash them forever”

Winston Churchill