General Insurance Article - L&G and unbiased.co.uk launch 'Every Business Matters'


 • Joint Legal & General and unbiased.co.uk ‘Every Business Matters’ campaign reveals UK share protection gap of £683 billion
 • Two fifths of UK business owners expect the remaining owners to buy their shares in the event of their death
 • Yet, almost two thirds of businesses do not have any financial protection to cover the funds needed to purchase the deceased’s share of the business
 • Follow the campaign using #everybizmatters

 Around one million businesses across the UK are exposing themselves to serious financial risk through the absence of share protection insurance, according to a joint campaign launched by Legal & General and unbiased.co.uk. The ‘Every Business Matters’ campaign has identified a growing UK business share protection gap of £683 billion, a figure which has increased by 60% from 2011, when it stood at over £427 billion.

 According to the study commissioned by Legal & General, 45 per cent of UK business owners expect the remaining owners to buy their share of the business in the event of their death. Yet despite this, only 40 per cent of businesses have taken out life cover to ensure the funds are available for such a purchase.

 This has significant implications for smaller businesses which could find themselves exposed to serious financial and commercial risk in the event of one of their business owners dying, leaving the remaining owners concerned about the future control of the business.

 Interestingly, when it comes to succession planning four out of five (81%) SME owners say they would like to pass on their company shares to specific beneficiaries in the event of them passing away, but almost half (44%) are yet to put any legal instructions in place to ensure these wishes are honoured. A further third (31%) have a will in place but have failed to include instructions about their shares.

 Further to this, while 56% of businesses across the UK say they have reviewed their Partnership Agreements in the last year, and 59% their Articles of Association, almost half have not (44% and 41% respectively). More worrying still, over a third (35%) of businesses admit they have never reviewed their Partnership Agreements since the business was started, and a further third (33%) their Articles of Association.

 Clare Harrop, Head of Specialist Protection at Legal & General says: “Losing a Director or Partner has the potential to cause serious issues for any business. A business owner’s death can lead to disruption in the business and raise questions over ownership at a very difficult time. Business Share Protection is therefore invaluable to any business, ensuring a cash lump sum is available whenever death occurs, enabling the remaining business owner to buy the deceased’s share and retain control of the business. Many business owners are not aware that this type of protection is available and we have made it our mission to raise awareness.”

 Karen Barrett, Chief Executive at unbiased.co.uk comments: “Millions of businesses across the UK are exposing themselves to serious financial risk by not having adequate protection to cover their shares. A business owner passing away is not only a personal and emotional loss but it can have a big impact financially and mean the remaining owners have to stump up a sizeable amount of cash very quickly in order to buy the deceased’s share.

 “The aim of our ‘Every Business Matters’ campaign is to raise awareness about the growing business protection gap, and communicate the importance of protection to business owners and the business protection market.”
  

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