Business protection represents just 1% of annual protection sales in the United Kingdom.
Most advisers are comfortable discussing personal protection, but many hesitate when it comes to business protection. This hesitation creates a significant gap in protection for business owners and their employees. The reality is that a business owner’s personal wealth is inextricably linked to their business success. By helping them build more resilient businesses through appropriate protection, advisors can secure not just the business itself, but also the livelihoods of everyone it employs.
Business protection isn’t a single product but encompasses several types of coverage designed to ensure financial stability during challenging times. Core business protection solutions include key person cover (protecting a business against the loss of crucial team members), shareholder or partnership protection (helping surviving owners buy back shares if one dies or becomes critically ill), and business loan protection (repaying outstanding business loans if a guarantor dies or is diagnosed with a critical illness).
Beyond these core solutions, there’s a whole range of employee benefits that fall under the business protection umbrella. These include executive income protection and relevant life policies, which are essentially private sick pay and death in service contracts for directors and employees. Group schemes, including group income protection, offer businesses ways to provide valuable benefits to their entire workforce. While some of these products might not require special licensing, they still demand a thorough understanding of business structures, taxation, and the interplay between
For advisers who want to enter this space, the journey should begin with building confidence and understanding the language of business protection. Start by introducing business protection naturally into conversations with business owner clients, leaning on Business Development Managers (BDMs) for support, and using available resources to enhance your knowledge. The tax implications of business protection products are particularly important to grasp, especially for products like executive income protection where the benefit formula is higher (80% versus 60% for personal policies) to account for tax deductions when benefits are paid through payroll.
Understanding which product is right for which situation is crucial. Executive income protection works well for limited company directors where the company pays the premiums, potentially gaining corporation tax relief while providing higher benefit levels that account for tax deductions. However, it’s important to understand when group risk solutions might be more appropriate, particularly for businesses with more than a few employees. Flexibility is another consideration—executive income protection policies can’t necessarily be converted to personal policies if employment status changes.
Whether you choose to specialise in business protection or partner with someone who does, the key takeaway is “write it or refer it.” Don’t let clients miss out on vital protection just because it falls outside your comfort zone. With the right knowledge and approach, business protection represents not just an untapped revenue opportunity for advisers, but a chance to provide comprehensive protection that strengthens businesses, secures livelihoods, and creates more resilient communities.
