While you likely have insurance for your business premises and equipment, many business owners overlook their most valuable asset, their people. If a key employee, a business partner, or you as the owner were suddenly unable to work due to illness or death, the financial impact could be devastating.
Business protection insurance is designed to help you mitigate those risks, ensuring your company remains resilient no matter what the future holds. Our business protection calculator can help you to determine how much cover your company needs.
What you can calculate with this tool
Our business protection calculator is a comprehensive tool that helps you determine the right level of cover for three critical areas of corporate risk. By inputting a few key figures regarding your turnover, profits, and share structure, you can identify the financial gap that would need to be filled if a tragedy occurred.
The tool provides estimates for:
Key Person Insurance:
Specifically designed to cover lost profits and recruitment costs for those individuals whose skills, knowledge, or leadership are vital to the financial success of your business. This might be a top salesperson or lead developer, for example.
This section of the calculator determines the sum assured needed for business recover.
Shareholder Protection:
This type of policy ensures remaining owners can maintain control of the company if a business partner or shareholder passes away.
Our calculator helps you determine the lump sum required by the remaining owners to buy back the shares if a shareholder dies or becomes critically ill.
Relevant Life Insurance:
Relevant Life cover is an individual life insurance policy taken out by a company for an employee including directors and shareholders.
The calculator helps you determine the level of cover based on a multiple of the employee’s total remuneration package, including salary, bonuses, and benefits in kind.
How our business protection calculator works
We’ve designed the calculator to be intuitive and quick to use. You simply need a few core figures from your latest accounts:
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Select the type of policy you want to calculate using the radio button
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Input the relevant information, which could be:
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Your annual turnover and gross profit
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The salaries and roles of the people you wish to protect
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A rough estimate of the company’s total value for shareholder calculations (You can use our business valuation calculator to help with this)
- You will get a full breakdown of the cover needed and how it will support your business or employee, relevant to the insurance type chosen.
Each calculation is based on different factors, depending on the option selected:
- Key Person Cover (Profit-Based): Divides total gross profit by the number of staff to estimate each person's contribution, then multiplies by the recovery period — the number of years it would realistically take to recruit and train a replacement to the same level.
- Key Person Cover (Salary-Based): A simpler approach that multiplies the key person's annual salary by a factor (typically 5–10x). This is quicker but may not reflect the true financial impact of losing that person.
- Shareholder Protection: Calculates the value of an individual's shareholding based on the current company valuation. This is the amount the remaining shareholders would need to buy back the shares if a shareholder dies or becomes critically ill.
- Relevant Life Policy: Calculates cover as a multiple of total remuneration (salary + dividends + benefits in kind). HMRC allows up to 25x for younger employees, reducing with age. This is a tax-efficient way for a company to provide life cover for employees and directors.
Always seek professional advice to confirm the right level of cover for your business.
Why use this calculator?
Understanding your financial exposure is the first step toward securing your company’s future. Using a calculator allows you to move away from estimates and toward a data-driven strategy. It can help you to:
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See exactly where your vulnerabilities lie
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Get an instant estimate without waiting for a manual audit
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Prepare figures to start meaningful conversations with your co-directors and stakeholders, as well as an independent financial adviser, once you’re ready to set up business protection policies
However, keep in mind that as with any online tool, there are limitations when it comes to the bespoke nature of accurate insurance cover. While our calculator provides an accurate starting point, it cannot account for every nuance of your business, such as complex cross-option agreements or fluctuating market volatility.
This is why it’s important to speak to someone with expert knowledge of business protection policies, such as one of our helpful independent advisers, once you have your estimates. Reach out to our business protection experts below for helpful advice:
Get bespoke business protection quotes & advice
Example calculations
To give you an idea of how business protection figures might look, here are two common scenarios:
Key person insurance example:
A software firm has a lead developer earning £80,000. They are predominantly responsible for a project generating £500,000 in annual profit so they opt for a profit-based calculation.
The calculator would suggest: £2,500,000 over a 5 year recovery period
A shareholder insurance example:
A business is valued at £1.2 million with three equal shareholders.
The calculator would suggest £399,600 per shareholder
Relevant Life Protection example:
A retail business has a 40 year old shop manager with a salary of £25,000 and benefits package worth an additional £5000.
The calculator would suggest £750,000 based on a multiplier of 25x
Get bespoke business protection insurance quotes today
A calculator is a fantastic diagnostic tool, but the real value comes from a policy that is tailored to your specific industry and tax position. Because business protection involves legal agreements (like trusts and shareholder cross-options), it is vital to speak with an expert.
We can help you take the results from your calculation and find the most competitive premiums. At Money Helpdesk, our business protection insurance specialists have access to the whole market, so they can ensure you secure the very best policies for your business, whether you have 5 or 5000 employees.
They can also:
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Identify which type(s) of protection your company needs
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Compare the policy features of the whole range of available providers
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Ensure quotes are tailored to your company’s unique structure and risks
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Find the most cost-effective and tax-efficient cover
Get started here if you’d like a free, no-obligation chat with an advisor specialising in business protection insurance
FAQs
Relevant life and key person cover premiums can be treated as a tax-deductible business expense. However, the tax treatment of shareholder protection can be more complex, which is why professional advice is recommended.