Company Insurance

In this litigious world we now live in protecting your business is not only often a legal requirement but almost certainly a sensible consideration.

What areas can you cover your business against?

The list below gives you an indication of the areas that you may wish to consider coverage:

Buildings – insurance for building structure e.g. boundary walls and out-buildings
Contents – insurance for materials, computers, fixtures, fittings and glass
Computers – covers computer breakdown and loss of data
Directors and officers – cover to protect against negligence and legal action
Professional indemnity – insurance against professional negligence claims
Public liability – cover for legal liabilities arising from third party injury or damage
Employers liability – covers legal liability for injury to employees
Business interruption – e.g. flooding or fire
Fidelity guarantee – insurance for loss of money from theft by employees

Shareholder Protection /Partnership Protection

Have you considered what might happen to your business if you or one of the owners of your business becomes critically ill or dies?

The effects may not be limited to the financial impact that losing a key person to the organisation may have (See Keyman Insurance) but also the impact to the business from:

The family wishing to sell their share of the business be it back to the remaining shareholders, an unsuitable buyer or worse a competitor
The family may look to wind up the business to realise their share
Perhaps another family member may wish to become involved with the business which at best could be disruptive and worst could devalue the business.
Funds allocated to other purposes may need to be used to purchase the shares
Loan agreements secured and other agreements requiring directors indemnity may be called in or at best renegotiated

Shareholder Protection also referred to as Partnership Protection can help

In the event of a shareholder’s death or serious illness shareholder protection ensures you have the necessary funds to:

Ensure the dependants of the critically ill or deceased shareholder are financially secure
Prevent the sale of shares to hostile parties, or competitors
Prevent the organisation being wound up to realise capital
Enable the remaining shareholder to keep control of who's in charge of the business
Maintain business stability and continuity
Retain confidence of employees and customers
Avoid having to draw on funds set aside for other purposes
Settle outstanding loans and agreements

Group Life Insurance

Though mortality rates are improving significantly there is still a high percentage of people who will die during their working life.

Group Life and Critical Illness Insurance offer the employer the opportunity to provide employees with an important level of benefit, a lump sum should they die or in the event of diagnosis of a specified critical illness during their service to your business.

Group Life Insurance can help

Provides employees peace of mind of knowing that dependants will be provided for in the event of early death or critical illness
Often a simple set-up procedure with no forms or medical histories required if benefits do not exceed Free Cover Limits
Forms part of a complete and attractive benefits package to help recruit and maintain high calibre staff
Can be structured to only cover certain employees

Group Pensions

Since October 2001, a business with five or more employees is required by law to provide access to a stakeholder pension scheme, unless it is exempt.

A stakeholder pension is a type of low-charge pension, that must satisfy a number of minimum government standards. The alternatives are Occupational Pension Schemes or Group Personal Pension Arrangement.

Your business is not legally required to provide an occupational pension scheme or a group personal pension arrangement. These are voluntary pension arrangements that you can put in place to provide retirement and death benefits for your employees and their dependants.

However when asked what employees would like to see in see in their benefits package a pension was valued by 73%* therefore a key recruitment and retention tool.

There are also changes that may come into effect in 2012 that make it wise to look at the options available now. For more information about the Pensions Bill click here.

Keyman Insurance

Have you considered what might happen to your business if you or one of the key people in your business becomes critically ill or dies?

Key people could include owners, senior directors, sales people, production managers, research and development staff, or others with specialist skills or knowledge. Loss of these key people could result in:

Loss of key salesperson could result in significant reduction in turnover
Loss of key production / development staff could result in significant reduction in output
Loss of key operations manager could result in detailed knowledge of processes and systems being lost

These key areas alone could result in:

Loss of profits
Increased costs in recruitment and training
Loss of confidence and relationships between suppliers and customers
Loss of important contacts
Employees may decide it is time to move on

Keyman Insurance / Key person Insurance can help

In the event of a Keyman / Key Person's death or serious illness Keyman Insurance ensures you have the necessary funds to:

Replace potential lost profits
Recruit and train a replacement
Provide enough capital for the businesses continuity until the replacement reaches the same level as the key person
Maintain business stability for employees
Maintain business stability for suppliers and customers
Settle outstanding loans and agreements

Group Income Protection

90% of employers consider the cost of absence as significant to their business *

In addition to the obvious direct salary of an employee being absent there are also other indirect costs to the business:

Low morale among staff doing extra work to cover absentees
Reduction in own work achieved by employees covering absentees
Cost of managing absence
Potentially higher labour costs of providing temporary replacement
Training costs of interim replacement

Under the Disability Discrimination Act employers must make adjustments to the working environment to enable a disabled employee to return to work.

If the employee is a valued member of the business you may also feel morally obligated to pay them more or for longer than Statutory Sick Pay which again will affect your businesses finances.

Group Income Protection can help

In the event of an employee developing a recognised long term illness Group Income Protection will provide a monthly income.

Group Income Protection therefore provides:

Financial assistance over and above Statutory Sick Pay for employees
Can be structured to pay a monthly benefit to the employer to cover costs to the business caused by the absence
Help control payroll costs
Can be used to attract and retain staff
May offer a lump sum payment to be used if the employee is not ever going to return to work
Some offer rehabilitation consultants to help get the employee back to work and keep you the employer up to date with their medical progress
Can be structured to only cover certain employees