KW: Shareholder Protection Insurance
meta: Self-employed or thinking about making the jump? Here, we answer ‘what insurance do you need if you are self-employed to ensure you can protect your business?’
Self-employment is a broad term for any individual who is employed by themselves or operates their own business. It can also apply to freelancing individuals. Self-employment in the UK has been on the rise in recent years, with the Office for National Statistics reporting that 14% of the national workforce classed as self-employed from June to August 2020. However, as with any employment, it requires the relevant insurance to protect you, your business and your employees.
As a self-employed individual or business owner, you and your employees are an integral part of your company and its biggest asset as its revenue and success grow. It is therefore important for self-employed individuals to understand what insurance they need if they are self-employed.
What Insurance Do You Need If You Are Self-Employed?
Business Life Insurance
As it is your business, you are an essential part of the running of the business. Business life insurance encompasses many forms of business protection, but its fundamental job is to protect your business’s finances and future should something, such as long-term illness or death, happen to you or to another key person. The different types of business life insurance can also mean key person insurance, business loan protection and relevant life plan.
Key Person Insurance
As a self-employed individual, you are in a key position of responsibility and as such will require Key Person Insurance. This covers any issues or costs that occur if you, or another key person such as a partner or key practitioner, is unable to work due to illness or injury. This insurance serves to protect you from the costs that could be a result of this, such as paying someone to cover for the key person or to cover for the loss of revenue, and to protect the business.
Relevant Life Plan
Many people who are self-employed are business owners and have the same responsibilities to their employees as all other employers. A relevant life plan provides a life insurance policy for an employee and functions in the same way as a death-in-service policy with most of the same benefits, ensuring that your employees’ dependents have the same financial protection as any other business.
Shareholder Protection Insurance
Shareholder protection insurance further protects the business if one or more shareholders are unable to continue contributing to the business, due to ill health or death. This cover gives the remaining shareholder or shareholders the necessary funds to buy the shares from the ill shareholder, rather than requiring company funds be used or risk the shares being sold or inherited by an unwilling beneficiary. This insurance is particularly useful for small, self-owned businesses who may otherwise struggle to raise the necessary funds for a large pay-out.
Executive Income Protection
Executive income protection for limited or private companies relies on a company-owned account and pay-outs for employees in times of ill-health or death-in-service. For those who are self-employed, an executive income protection insurance policy affords them the same financial care and protection as all other employees. The policy covers household bills and expenses due to lost income, with the average pay-out being 80% of your income each month.
How You Can Find The Best Policies – Get In Touch
Those who are self-employed, and their employees, are entitled to the same legal protections and securities as the rest of the workforce. The responsibility of applying for and maintaining these protections falls to the self-employed professional or business owner, with policies existing to cover the majority of eventualities.
WIS Business Protection offers expertise on relevant life insurance and executive income protection to protect your interests and secure the future of your business and income.
To discuss the future of your business or learn more about what insurance you need if you are self-employed, get in touch with our team today.