Nearly half (44%) of business owners say that their business would fold within 12 months of the deat...
Nearly half (44%) of business owners say that their business would fold within 12 months of the death or critical illness of a key person, yet only 4% have stakeholder protection in place. Research from Legal & General found that only half had any formal agreement to establish what would happen in the event of the death of a business owner.
Half the businesses surveyed had corporate debt, with almost 40% of those that do holding more than £100,000, yet just 46% of these businesses have life or critical illness policies in place to cover that money owed.
The survey indicated 28% of businesses thought protection too expensive, 17% had not got around to it and over 10% believed it would not impact their business.
Clare Harrop, head of specialist protection at Legal & General said: "Almost every small business has at least one key individual yet many seem completely under-prepared to handle an event such as the death or critical illness of such an individual. Almost one in two businesses say that they would go to the wall within a year as a result. It is the responsibility of the protection industry to get in front of corporate clients and make business owners aware of the importance and benefits of key person and business loan protection."
"Business owners put blood, sweat and tears into getting their company off the ground, so why risk losing it all with inadequate financial planning and not having the proper protection safety nets in place?"
L&G will shortly release a Business Protection DVD for advisers.
