ProtectionMay 28 2013

Every business matters when it comes to insurance

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ByIona Bain

A study of 500 businesses, jointly conducted by Legal & General and adviser listings site Unbiased, also showed over a third of businesses have never reviewed their Partnership Agreements.

Two fifths of UK businesses owners expect that the remaining partners in the business will buy their shares if they die. Yet almost two thirds of businesses have no protection that would cover the amount needed to buy a deceased partner’s share of the company.

The providers have teamed up to raise awareness of the UK’s business share protection gap of £683bn, which has risen by 60 per cent since 2011. The 29 page Business Protection Research Study was conducted to help publicise the “Every Business Matters” campaign.

Clare Harrop, head of specialist protection at Legal & General, said: “Losing a director or partner has the potential to cause serious issues for any business. A business owner’s death can lead to disruption in the business and raise questions over ownership at a very difficult time.

“Business Share Protection is therefore invaluable to any business, ensuring a cash lump sum is available whenever death occurs, enabling the remaining business owner to buy the deceased’s share and retain control of the business.”

Kusal Ariyawansa, financial planner for Manchester-based Appleton Gerrard, said: “It seems that some business owners don’t realise that businesses have a value that will last for years after the owner has died. Therefore, if one’s objective is to leave a lasting legacy, owners should make sure they put in place sensible plans for their shares.”