Business Protection: Are advisers doing enough to help clients mitigate risk?

The economic environment is tough and small and medium-sized businesses (SMEs) must perform profitably and sustainably. Yet arguably the most important asset to any business is its people; not enough of the UK's 5.6m private businesses have appropriate policies in place to counter unexpected risks that can derail even the most well-run firms. This can include anything from not having a safety net if a key person in the business dies or is diagnosed with a serious or long-term illness, to share and partnership protection.

Why is this?

Much of it comes down to the education of business owners. The most recent ‘State of the Nation' report of business owners showed that 75% of businesses have not heard of relevant life plan or executive income protection. This is no surprise given the fact that the report has shown year on year that there is a lack of awareness of business protection; even though 52% of businesses would cease trading in under a year if a key person died or become critically ill.

So, the need for advisers to have effective and compelling business protection conversations with relevant clients has today become imperative. To put it simply: to be able to adopt the correct risk-protection policies to mitigate risk, business owners cannot make an informed decision if they are not informed.

Real life examples highlight the importance of those conversations. Jess, 41, is a company director. In January 2023, Jess's company took out an executive IP policy with LV= to cover her if she could not work due to illness or injury. The policy was set up to pay the company £2,666 per month should she be unable to work.

Unfortunately, less than a month after setting up the policy, Jess suffered from a stroke. This impacted her mobility on one side of her body. Jess' company decided to claim on the policy. LV= was able to approve her claim and to date they have paid her employer £14,700. The firm has also given Jess details of how to access LV= Doctor Services and talked about the rehabilitation support it can offer as part of her policy and any additional support she needs to support her recovery.

Our panel of experts will explore the business protection market, potential risks businesses may face, the opportunities and value-added benefits that make business protection policies so beneficial for advisers' clients.