Posted on: 07-03-2017 in Insurance
There’s a lot of talk about how SME insurance can be expensive.
But look at it this way:
On top of everything else an SME has to pay every month, any cost looks expensive.
You get to become ruthless with costs when you are running a business, so expenses which aren’t strictly necessary simply have to go – and this means insurance can get overlooked.
Big mistake. SME insurance protects against surprises in the future that can, out of nowhere, turn your business inside out. Insurance is a necessity – not least because it protects against events (like staff getting very ill) to which there is no other practical response at a time when the business could go under.
|Question #1: what happens if one of our key individuals/ owners dies?|
What would be the financial implications to the company of losing one (or more) of our key personnel either to illness or death?
|Question #2: can we keep the SME together?|
Do we have enough capital in reserve to provide the family of the deceased Partner with a monetary amount equal to their share in the business?
|Question #3: can we get illness cover for absolutely ages?|
Can insurance arrangements be put in place to cover illness where the partner or key person(s) may be off work for an extended period of time?
|Question #4: how flexible is “key man” insurance cover?|
Can cover be increased once it is in force?
|Question #5: does “key man” cover stay with the key man, or with the SME?|
If a Partner leaves the business, can they take the policy with them and transfer it to an individual policy?
|Question #6: do policy costs rise with the age of the insured individual / owner?|
Will the cost of cover and protection increase year on year as the individuals insured get older?
|Question #7: what about insuring new individuals / owners?|
Can new policies be added when a new partner joins or when a new key person joins?
|Question #8: what if we want to scrap any insurance?|
Can a policy be cancelled once in force?
|Question #9: how often do we have to pay premiums?|
How are the premiums paid for the protection policy?
|Question #10: what about insurance and Trusts?|
Can the policies be placed into a Trust?
The irony about SME Insurance, says Sam Ebbs, Wealth Manager at Holborn Assets, is that “Business owners would wake up in the morning and have breakfast in their home that they have insurance on to protect against something happening to the contents or the home itself. They would then jump in their car and drive to work in a car that has insurance on in case the worst was to happen. i.e. The financial implications of an accident would be taken care of by the insurance company.
They then arrive at their place of work, which ultimately provides the financial means to support the home, car and family life, but haven’t got the right protection in place for in the event something unforeseen was to happen that would have significant negative impact on the company going forward. ie the SME. Business insurance gets overlooked, when the whole domestic picture depends on business continuity. This can easily be resolved.”