Business assurance is a category of financial planning specifically designed to protect businesses and their owners from the financial consequences of death, disability, or critical illness. It includes key person insurance, buy-and-sell agreements, contingent liability cover, and personal guarantee protection — each addressing a different vulnerability in a business owner's financial life.
Most business owners have the majority of their personal wealth tied up in their business. Yet most have no formal plan for what happens to that business — and that wealth — if they die or become disabled. Without a buy-and-sell agreement, a deceased partner's share may be inherited by their spouse, who becomes your new business partner whether you want that or not. Without key person cover, the death of a critical individual can cripple a business's cash flow and bank covenants overnight.
I conduct a full business assurance needs analysis — identifying your key people, your business's financial exposure, your existing agreements (or lack thereof), and your bank and lease obligations. From there, I structure a solution that addresses each exposure with the appropriate product and legal agreement. Critically, the assurance must be backed by a legally sound agreement — this is where the LLB makes a material difference.
Business owners with partners or co-shareholders, businesses with key employees whose absence would materially affect revenue, and business owners with personal guarantees on business debt.
A buy-and-sell agreement is a legal contract between business partners that determines what happens to a deceased or disabled partner's share. It is typically funded by life assurance — ensuring the surviving partners can buy out the deceased's share at a pre-agreed value, rather than inheriting an unwanted business partner.
Key person insurance pays a lump sum to the business upon the death or disability of a person whose contribution is critical to the business's revenue or operations. It gives the business the financial breathing room to find a replacement, service its debt, and maintain client confidence.
Almost certainly yes. Business values change, agreements become outdated, and cover amounts that were adequate three years ago may be significantly insufficient today. A review costs nothing and the gaps it reveals can be significant.