Reviewing business protection policies 'crucial to retention'

When asked to think about the benefits of their business protection insurance, almost half (48%) of companies with cover said it gives them peace of mind, while a third (32%) said it’s the protection they feel best protects them for the long term.

A quarter (23%) believe their cover is good value for money, while a fifth (20%) said business protection insurance doesn’t have high annual payments compared to other business costs, presenting an opportunity for the market to reiterate the value and need for business protection.

However, despite the positivity about the cover they have in place, almost half (49%) of companies with business protection had considered cancelling cover in the past.

The biggest reason firms had considered cancelling their policy is because of the cost of premiums (13%), followed by businesses trying to save on running costs (9%) and money being tight (9%). Another 9% said it’s due to business changes, with 7% saying they believed the cover was no longer needed.

When discussing the reasons firms had originally taken out business protection, 17% said they had been worried about losing the business, with 14% wanting to ensure the business would continue should anything happen to a key person. Similarly, 9% wanted to make sure the business would be passed to a specific family member, or the management team (8%). A further 13% had taken out cover after seeing what had happened to an unprotected business.

Many companies put business protection in place after advice from a professional, such as a personal financial adviser (12%) or solicitor (11%), or the businesses financial adviser (11%) or solicitor (11%).

Deepak Jobanputra, managing director at VitalityLife, said: “Business protection plays an essential part in keeping companies afloat if someone key to the business dies or becomes seriously ill.

"This research highlights the importance of supporting advisers in the crucial role of advising on and regularly reviewing business protection, to ensure it remains relevant as needs change.

"Reminding companies of the significance of the cover they have in place and why they bought it in the first place, can help keep valuable cover in place for the long term.”