Protecting businesses from a “devastating financial effect”

As major insurer adds to offering, but which type of firms need this cover?

Protecting businesses from a “devastating financial effect”

Professional Risks

By Lucy Hook

Insurer Aegon UK announced this week that it would be adding to its business protection offering – a cover that protects businesses against the financial impact of the loss of a key person.

Aegon’s new key person replacement service provides business owners with support from consultants in the event that they need to replace key personnel, which includes advice and guidance on employment law as well as the hiring process.

“Business continuity and succession planning may not be high on the priority list for many businesses, but losing a key employee, especially one with specific credentials, could have a devastating financial effect on a business,” Stephen Crosbie, protection director at Aegon UK, said in a release.

But when it comes to business protection cover, it’s not just small businesses that need insurance.

“While our customers tend to be small-medium sized businesses, even large businesses will carry some risks that could be protected,” Crosbie told Insurance Business.

“The protection needs and considerations of a business will vary according to their size, set-up and attitude to risk,” he explained.

Research commissioned by the insurer in 2015 found that of the 17.57% of clients that were considered to have business continuity needs – a key person and corporate debt protection – only 8.12% have cover in place.

The research also found that, in many instances, the key person concerned is the owner of the business.

“Business owners are particularly exposed to financial risk, as so many of them rely on their business for not only their income but potentially their retirement plans as well,” Crosbie added.

“Protecting their business could be the keystone to ensuring the future for them, their families and their employees.”

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Legal & General hit by £64 million impairment loss

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