Business Protection

An In-depth Guide to Corporate Client Vulnerability

KLOFinancial |

Nobody could have predicted the events that have unfolded over the past year and the continuous period of uncertainty that we are currently living through. Although, one thing is for sure – the coronavirus pandemic has highlighted how rapidly circumstances can change and how heavily this can impact the wellbeing of your business.

Since the start of the pandemic, numerous companies have borrowed (under government schemes), a sum equating to a total of £80 billion of additional finances from banks or other lenders.

With many small businesses across the UK facing difficulty, over 200,000 SMEs have already seen permanent closures.

As a business owner, being prepared for the worst is essential for ensuring the survival of your company, especially in times of uncertainty. The uncertainty that has spread across the UK, proves that even an established business needs to have plans in place. After all, you never know what life is going to throw at you!

How can I protect my business from the loss of a key person?

With financial advice, you can help protect the future of your business by insuring it from the loss of a key employee.

Key person insurance involves your business taking out a policy on a key employee. This type of policy acts like life insurance or critical illness cover and can be an imperative part of a successful business continuity plan for your company.

This cover will ensure that if a key person passes away, your business can continue to thrive.

In the event of a claim, this policy will cover your expenses until your company is able to find a suitable replacement. You can ensure your company receives payment as set out in the insurance policy agreement. This can be in the form of:

  • A regular income (in the case that the key person is diagnosed with a critical illness).
  • A lump-sum (in the case that the key person has passed away).

In the worst-case scenario, this insurance policy can also help cover any debts and can be used to distribute funds to investors.

How can I protect myself as a shareholder?

If a company shareholder passes away it can raise many uncertainties, such as what will happen if the shareholders family is to inherit their share of the business? Will the share be offered back to you? If so, can you afford to purchase it?

Most business succession plans involve essential Shareholder Protection cover, which provides life insurance to all co-shareholders. Then, in the event that a shareholder does pass away, other shareholders will have the option to purchase the share from the inheriting family.

Working two-fold, it protects the family of the deceased financially, whilst protecting the interests of the remaining shareholders.

Also, if a sale is involved, discussing business succession planning with a financial adviser can help you consider the timing and terms of the sale, as well as any potential tax consequences of this decision.

Getting a business loan

Your business can take out business loan cover, which is a life insurance policy that will help your business repay any debts if one of your shareholders passes away.

This policy, alongside key person insurance, can also ensure that your business can secure a loan if the loss of you or a key person results in insufficient funds to cover any debts. This can be very useful, as many lenders will refuse to loan your company money without these protections in place.

This can include mortgage payments on business properties or repayments for a loan taken out by the business.

How can KLO Financial Services help me?

At KLO Financial Services, we want to protect our vulnerable customers in times of uncertainty.

We can help you take all of the necessary precautions to ensure that the future of your business is protected while supporting you in avoiding any extra or unnecessary costs. Our advisers will organise the appropriate cover for you, so you can focus your time on running your business – and continue to support your very important clients.

With specialist knowledge in business protection, our independent financial advisers can help you secure the future of your business and its employees, creating excellent plans to reduce the risk to your business’ success. This includes:

  • Business continuity plans
  • Business succession plans

Our independent financial advisers have no ties to any organisations and are completely client focused. We take pride in understanding your business needs and interests and will always be impartial and tailor the best long-term strategies to protect your company’s future.

We work in collaboration with solicitors to provide you with peace of mind and help you feel secure should any financial issues arise.

For more information on our services, get in touch! Contact us by calling 0121 726 4720 or emailing us at