New research from Vitality has highlighted how business owners are putting their livelihoods at risk by not having business protection cover in place to protect their business should a key employee be unable to work.
The research found that for three in five (60%) business owners, their business is their main source of income, and for three in ten (30%), it’s their only source. Yet they are risking this income with more than a third (37%) admitting their business has no protection in place to protect them should they or a key member of staff die or suffer a severe illness.
Furthermore, the data shows they are even less likely to have personal protection in place, with two fifths (43%) saying that they do not have any form of personal cover such as income protection or serious illness (critical illness).
Three in ten (30%) business owners say they know of a business that has gone bust following the death or serious illness of an owner, key employee or business partner. However, the research shows they haven’t considered what would happen to their business in this scenario, with two in five (38%) admitting they have never thought about it and when asked, a quarter (25%) declaring that their business would fail.
Nick Telfer, Head of Protection Specialists at Vitality, said: “With the majority of business owners dependent on their business for financial security, there is a clear need for advisers to speak to them about business protection and what back-up plans they have in place to cope with unforeseen events.
“Many advisers will have been providing business owners with personal financial advice on family protection, mortgages, pensions and investments, but business protection cover might not yet have been part of the conversation.
“What’s more, with businesses finding themselves under increasing pressure with rising inflation and increasing cost of living, advisers can play an important role in ensuring owners have assurance that their business will be protected should a key person in the business die or suffer a serious illness.”