During a meeting with a business owner this week, I had the tables turned on me when she started a discussion about the relative merits of business protection plans.

Apart from fact that this is something I should have been doing, it did highlight that this business owner was thinking about the risks (dare I say it again, because of the current economic climate) to her personal circumstances if something was to happen to her fellow Director.

She did also allow me to regain control of the discussion as the understanding of the difference between Key Person Cover and Director’s Share Protection (and how they can overlap) wasn’t fully clear to her.

When you compare the statistics of the number of US businesses that have protection in place for their Key People and Directors to the UK, it shows the enormous financial risk many British business owners are prepared to take by not putting the proper arrangements in place.

A few throw away lines to highlight some of the issues:

“would you be happy if your biggest rival in business was able to buy into your firm because you hadn’t made sure your fellow Director’s shares were subject to the proper agreements in the event of death?”

“…if the most important fee earner in your business was diagnosed with cancer, would your bank be sympathetic to your request for increased overdraft facilities?”

There are a number of questions that owners of businesses should be asking themselves to highlight the potential need for some type of Business Protection cover.

I have set out a list of the major ones I think you must consider now in Key Questions for Business Protection.

If you need to discuss the implications of your answers to these questions and need professional guidance as to how to set the correct type of Business Protection arrangements for your firm up, please give me a call.

Roland Oliver

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