When considering business insurance, don’t forget people… Dear Editor, While recent circumstances have conspired to make businesses increasingly aware of the need for crisis planning to ensure a minimum service in the face of disaster, few have considered what happens when key people become unable to work for long periods. Cars, building and business office contents are insured as routine, and software backed up regularly - but how often do businesses take stock of their most valuable assets - their people? SMEs and partnerships are particularly vulnerable because they have fewer people, and key staff tend to fulfil a variety of important roles as well as carrying essential ‘soft’ knowledge about the company. What happens if, for example, one half of a partnership suffers a severe accident or prolonged illness and is unable to contribute to the business for several months? If the incapacitated partner continues to draw an income from the business, profitability may start to plummet, customers become disillusioned, and the effect on business continuity can be catastrophic. It’s not just insuring against the impact of losing a key person that SMEs need to guard against, either. Most companies provide life assurance for employees, designed to pay out in the event of their death in service, but how often are these policies reviewed? Yet doing so can mean substantial savings for SMEs. Fierce competition, technology reducing insurance company costs, better awareness of health and fitness and decreases in mortality rates have all conspired to lower life insurance premiums by over 50% during the past 10 years - so many companies are paying over the odds for their insurance. A simple review of existing policies by a well informed independent financial adviser could yield substantial savings for any organisation with a ‘file it and forget it’ attitude to insurance. Yours sincerely Mike Neville Vantis Financial Management
•Date: 25th Nov 2005 • Region: UK • Type: Article •Topic: BC general |
