Consider the financial implications of losing your main contact-builder and money-winner; being unable to cope with the workload or unable to recruit someone of sufficient calibre, in sufficient time, to replace a key person.
“At Lifesearch, we always point out the risks if the business owner does not protect themselves,” Ms Thomson adds.
“While any insurance can be seen as a cost,” says Paul Moulton, small-medium enterprise director at Axa PPP Healthcare, “it should also be considered in terms of the impact to the business.”
According to him, advice on protection should explain the costs to businesses, large or small, of key personnel being able to access support and treatment in a “timely and convenient way”.
Mr Moulton adds: “Insurers understand this and even offer healthcare cover specifically intended for sole traders.”
Having the conversation
Small firms who have taken out business loans might benefit from a business loan protection, which is, in simplistic terms, like a life insurance policy paid for by, and for the benefit of, the business.
This can be “surprisingly cheap”, says Mr Conner, especially if the sole trader is young and healthy and the loan amounts are not “astronomical”.
However, failing to ensure a firm can repay the loan can be business critical – and should be pointed out to clients and potential clients.
As Legal & General’s Mr Kateley comments, business protection is no more expensive than family protection, as it is, in most cases, “simply term assurance”.
He says: “It might be a better question to ask whether, should the worst happen, whether the individual could afford NOT to have the cover. In reality, it can be a great deal cheaper than people think.”
simoney.kyriakou@ft.com
