If you’re looking to safeguard your company against unexpected financial losses, business protection insurance could be the solution. This type of cover can help protect your business against everything from legal disputes to loss of income.
In this guide, we’ll cover everything you need to know, including how business protection works, what it covers, and where to find the best policy and quotes for your business.
What is business protection insurance?
Business protection insurance is designed to help companies continue operating smoothly if key people become seriously ill, pass away, or if the business faces unexpected financial or legal challenges. A range of cover is available to protect against various scenarios.
It ensures that your business remains stable by providing a financial safety net, whether that’s replacing lost profits, paying for repairs, covering outstanding loans or legal expenses. Unlike standard personal protection policies, they are tailored specifically for businesses.
How does insurance protect businesses?
When you take out business protection insurance, you’re essentially insuring the company against various types of financial disruption. The business pays monthly premiums, and if a covered event occurs, the insurer pays a lump sum or an ongoing benefit to the business.
For example, if a key director were to fall seriously ill, the payout could be used to hire temporary cover, repay loans, or offset lost revenue.
What does it cover?
While the exact cover depends on your chosen policy, most plans protect your business from losses caused by things such as:
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Illness or injury: Providing financial support if a key person or business owner is unable to work.
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Death of a key person or shareholder: Paying a lump sum to replace lost income or for buying back ownership shares.
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Loss of business income: Replacing a portion of lost profits if your business can’t operate as usual.
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Outstanding business debts: Helps you repay business loans or other liabilities if something happens, like a director passes away or becomes critically ill.
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Legal disputes: Covers legal costs for issues such as employment claims, contract disagreements, or property disputes.
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Property damage or interruption: Some policies can include protection for physical damage caused by fire, flooding, theft, or vandalism.
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Returning to work: Some policies help key employees or business owners recover and return to work sooner with rehabilitation support.
Types of policies available
There isn’t just one form of business protection insurance; there’s a whole range of policies designed to address different business risks. The main types of policies include:
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Key person insurance: Protects your business against the financial loss that may occur if a key employee, director, or owner dies or becomes seriously ill.
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Shareholder or partnership protection: Provides funds for surviving business partners to buy out a shareholder’s stake in the event of death or illness, helping to keep the ownership lineage secure.
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Business loan protection: Covers outstanding business loans or director guarantees if someone integral to repaying these loans passes away or is unable to work.
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Business income protection insurance: Similar to standard income protection, it provides regular payments to help replace a portion of lost income if the business owner or key staff members are unable to work due to illness or injury.
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Business legal protection insurance: Pays for legal costs for things like employment disputes, tax investigations, or contract and property claims.
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Commercial property and asset protection: Often available as an add-on, similar to home insurance, this covers buildings, stock, and equipment against unexpected events such as fire, theft, and damage.
Each policy type can be arranged individually or combined into a tailored business protection package that suits your company’s size, structure, and industry.
How business insurance costs are calculated
The cost of business protection insurance premiums depends on various factors, including:
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The type of cover you choose and whether you add any extra protection.
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Your level of cover and the sum insured.
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Age and health of key individuals covered.
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Business size and structure will have an impact; certain policies are designed for small businesses, and some group risk protection is better for larger companies.
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Your industry's risk level matters, and higher-risk sectors, such as construction or manufacturing, may face higher premiums.
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Businesses with a track record of past claims might pay more (or face certain exclusions).
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Longer deferred periods (the length of time before the policy starts paying out) for group income protection policies, or longer payout durations (benefit period), generally increase premiums.
A specialist insurance adviser can help balance your level of cover and cost to ensure maximum protection for a competitive price.
Get a bespoke business protection insurance quote online
Finding the right business protection policy can be complex because no two businesses are the same. Online comparison tools can provide a general idea, but they often overlook the nuances that matter most, such as ownership structures, key person dependencies, or specific income protection needs.
A business protection insurance specialist can help you:
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Identify which types of protection your company needs.
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Compare the whole range of available providers and policy features.
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Get bespoke quotes tailored to your company’s structure and risks.
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Find the most cost-effective and tax-efficient cover.
If you’d like a free, no-obligation chat with an advisor specialising in business protection insurance, you can get started below:
Get bespoke business protection quotes today
Best UK business protection providers
The best provider for your business will depend on your size, sector, and type of cover. To give you an idea of the available options, here are some popular UK insurers offering business protection:
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Aviva: Offers a range of business protection policies, including key person, shareholder, and business loan protection. Aviva plans can include both life cover and critical illness cover, with a strong emphasis on rehabilitation and early intervention support to help businesses recover quickly from disruption.
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Legal & General: Provides one of the most flexible ranges of business protection options in the UK, including relevant life cover and executive income protection policies. Legal & General claims that 80% of underwriting decisions receive an instant decision.
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Zurich: Offers key person, partnership, and shareholder protection policies with flexible benefits. Standard critical illness cover for businesses includes 39 conditions, but the “critical illness select” cover includes up to 49 serious conditions. Zurich also allows policies to be placed in trust for smooth ownership transitions and succession planning.
Why do you need business protection insurance?
Running a business always comes with risks; it could be anything from losing a key team member to facing a legal dispute or income interruption. Business protection insurance gives you peace of mind knowing that if something unexpected happens, your business can continue to operate.
Key reasons to consider it include:
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Financial stability during illness, injury, or the death of key individuals.
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Protection from costly legal or tax-related expenses.
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Safeguarding the future business ownership and control.
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Covering debt repayments or operational costs.
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Helping small businesses and limited companies maintain cash flow.
Without protection, your business could face financial strain, forced sales, or even closure in severe cases. This insurance can help protect you against the unexpected and ensure your business survives, regardless of what life throws your way.
Why choose Money Helpdesk for your business protection?
Finding the right business protection insurance isn’t always straightforward. Every company has unique needs, from key person cover to legal protection and income continuity.
Our specialist advisors have extensive experience sourcing the most suitable and affordable business protection policies for small and large businesses operating across all sectors and industries.
Here’s why employers and business owners choose us to help them arrange a protection policy:
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We can get you tailored quotes for your specific needs
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Our advisors are 5-star rated on leading independent review sites
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Your first chat is free, with no obligation to proceed
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Access to exclusive deals from specialist business insurers
Ready to take advantage of a free, no-obligation chat with an advisor specialising in business protection insurance? You can get started here.
FAQs
Yes. Business income protection insurance can pay a regular income if you are unable to work due to illness or injury. This helps maintain cash flow and cover essential business expenses while you recover.