ProtectionNov 15 2016

Majority of business women lack protection cover

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Majority of business women lack protection cover

Almost three quarters of female business owners are are putting their firms in jeopardy due to lack of  financial protection, according to new research from Aegon.

According to information released by the life insurance, pensions and asset management company, 72 per cent of women who own their own business are with out any type of financial protection. 

In addition to this, more than half (54 per cent) of these women have no personal protection for themselves and their families if they’re unable to work, putting both their families and businesses at risk.

In 2014, 20% of SMEs were solely or partially-led by women, according to research company Censuswide, and this figure is set to grow.

However, the weight of the responsibility of running a company has failed to prompt female business owners to take action and seek advice on protection, according to Aegon. Fewer than one in three (32%) have spoken to an adviser about any change in cover.

By far the greatest stimulus for female business owners is when they become self-employed or set up a business (69 per cent).

An additional 10 per cent were prompted as they took out a business loan, which is a positive sign given banks now rarely make protection cover a condition of their lending.

Stephen Crosbie, protection director at Aegon, said: “These findings highlight that two thirds of female business owners have failed to have a conversation with an adviser about protection.

"This presents a significant opportunity for advisers to talk to female business owners, and those hoping to start their own business, about the value of business protection.”

In the event of illness or death, nearly half (45 per cent) of female business owners would rely on their savings to support their business and their families financially.

Just 13 per cent think their savings would last a year or more, and 22 per cent were worried that they would only last between one and three months. 

Crosbie added: "Many expect to turn to savings in the event of the unexpected but the reality is that these are unlikely to provide the financial support these women need for both their families and the day to day costs of running a business."