We all acknowledge that business protection can have a different level of complexity to personal protection. Whilst we’re using very similar products to achieve the same aims, the landscape is very different and often unfamiliar. Starting our conversations with simple, familiar themes can both help build confidence for the adviser, and help the client start to understand why they must commit to implement greater controls around the risks that face their business.

Three key areas

Any business protection conversation needs to begin by guiding the client towards the central themes that need to be addressed. When we have personal protection conversations, we might guide the client toward the need to protect their mortgage, their income and their lifestyle.

When it comes to business protection we’ll explain the risk by identifying three key areas:

Our next job will be to explain the impact of the risks, and the arrangements we can implement to mitigate the uncertainty and financial damage they could cause.

Key Person Cover, regardless of whether we are covering the profits or the debts (or both) of the business, fulfils one simple objective - it buys the business breathing space when the unexpected happens.

Helping owners identify and value key people within their business can be one of the trickier conversations that advisers will have to have with an owner or director as it might not be straightforward. Sometimes the members of staff who generate the most profit or income may not be key. For instance, if relationships with customers are transactional, then individual salespeople, even top performers, could be replaceable. Similarly, an engineer may be leading a company defining project however their knowledge could be easily and quickly replaced by a sub-contractor.

Getting the business owner to look at the day-to-day tasks of significant individuals within a company can be an effective way of identifying just how critical individuals are to the company’s ongoing success. Particularly in smaller firms, a job title does not necessarily denote the full range of someone’s responsibilities nor the loss to the company without them. Our range of Business Protection tools and calculators are an excellent starting place for calculating a sum assured for key people however it’s only by really getting to know the business can we ensure that we put the right cover in place.

This exploration of the key person’s contribution should start to help the owner picture the difficulties that could jeopardise their business in the event of the employee’s death or critical illness.

Alongside a clear primary purpose, Key Person Cover can also be used to demonstrate robust governance and a mature approach to risk management to potential partners. Consider a potential client presented with two similar tender documents. The only difference being that one document confirms that in the event of the death or critical illness of a key person for the fulfilment of the services, an insurance policy will pay out a pre-agreed amount of money. This money will then be available to quickly recruit a replacement, sub-contract supplied services or pay incurred penalties. This demonstration of professionalism, commercial awareness, and an ability to ‘cover all the bases’ could prove very influential in winning the contract on offer.