Insurance to Protect Your Business

2. Protecting People

A small firm is often dependent on its people, particularly its owner. While insurance is commonly associated with bricks and mortar cover, protecting people can prove as valuable to a business as covering premises and stock.

2.1 Key man insurance may be appropriate if the success of your business depends upon a few employees, such as a specialist engineer or a key salesperson. Businesses run by owner-managers are particularly vulnerable.

• Cover is usually equal to the estimated loss of profit that would result from that person's death.

2.2 Critical illness cover provides a cash lump sum for specific employees in the event of a serious illness, such as a heart attack.

2.3 Private health insurance and personal accident cover can help to retain and attract employees.

• Prompt medical attention may also help enable employees to return to work more quickly.

2.4 Income protection insurance protects individuals by paying their salaries while they are incapacitated.

2.5 In certain circumstances, directors or executive officers of a limited company can be held personally liable for their actions.

• Directors' and officers' cover can be purchased by a company for directors without counting as a benefit in kind for tax purposes. However, it must be bought and paid for separately from other insurances.

2.6 Travel insurance is strongly advisable for owners and employees travelling overseas.