Is your business adequately protected?

I am sure that many business owners protect their tangible assets such as their home with buildings and contents cover, and for their business, the buildings, machinery and vehicles will all be insured. But they may have partners, shareholders, or other key people with skills that are vital to the success of your business that they do NOT insure.

If they, or one of their key staff died, or was diagnosed with a critical illness, the financial impact on the business could be serious. That’s why planning to help protect the business from the financial consequences of losing its key people is vital.

What impacts could their death have on the business? Reduced sales or turnover? Difficulty in recruiting or training a replacement? Could the business afford to repay its creditors and keep trading? Could the business survive in what, for many businesses, is the harshest trading environment for many years?

Also just for a moment, consider what will happen to a business if a director, who is also a shareholder in the business, dies or is diagnosed with a critical illness?

• The business loses their experience and expertise
• What happens to their shares?
• Can the business or the remaining shareholders afford to buy their shares?
• Their shares might pass to someone who has no knowledge or interest in the business or that person might gain significant control over the direction of the company and make decisions which might not be in the best interests of the remaining directors or those still working for the company.

This is an area that is becoming very topical, and therefore if you, or any of your contacts believe that this is something they should review then please do pass on our details, email me on shane@kirkellainvestments.co.uk or give me a call on 01482 658989 to discuss in more depth.

Shane Beardsley
Managing Director / Independent Financial Adviser