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A Whistle-Stop Touring of the Business Protection Advice Process

  • simondunn1
  • Feb 13
  • 4 min read

(just try saying that after a few chablis!)


The process of arranging Business Protection policies follows a structured approach to ensure that a business receives appropriate cover based on its risks, requirements and priorities based on it’s budget. Below is a step-by-step breakdown:


1. Initial Fact-Find Meeting


The process starts with an in-depth fact-finding discussion between the business owner(s) and the insurance adviser. The goal is to gather key information about the business, including:


• Business structure and ownership details

• Key personnel and their roles

• Financial data, including turnover, profit and emergency fund details

• Existing insurance coverage

• Identified risks and concerns

• Business continuity planning


This stage ensures a clear understanding of the business's needs before moving to the next steps.


In addition to this, looking at how the owner’s family life interjects with their business life is often worthwhile as there is distinct overlap in some areas, such as Relevant Life Policies which are arranged for family protection purposes but are arranged as a business owned policy.

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2. Research on Cover Types and Levels of Cover


Once the fact-find is complete, I research the most suitable types of business insurance for that particular client, which may include:


• Key Person Insurance – Protects against the financial impact of losing a key, profit-generating employee.

• Shareholder Protection – Ensures surviving shareholders can buy out a deceased or incapacitated shareholder’s stake.

• Relevant Life Cover – A tax-efficient life insurance policy for employees.

• Executive Income Protection - Like Relevant Life Cover but a tax efficient way of providing long-term sick pay entitlement as opposed to life insurance.

• Business Loan Protection – Covers outstanding business debts if a key individual dies or becomes critically ill.

• Group Benefits - To provide life, critical illness or income protection cover to a specific group, rather than a single applicant.


I will determine the appropriate levels of cover, considering factors like company valuation, shareholder equity, loan balances, and key employee contributions and also taking into account standardised industry guidelines and even feedback from the businessses accountant.

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3. Research on Any Underwriting Issues


Before proceeding with an application, I also evaluate potential underwriting challenges, such as:


• Medical conditions of the applicants

• Lifestyle factors (e.g., smoking, hazardous hobbies)

• Financial justifications for cover amounts


For example, over the last 15-years, tolerance for things like higher BMI readings has come down meaning a client can more readily have their premium loaded due to being slightly heavier than ideal. When these loadings are applied the minimum premium increase is typically 25% upwards meaning a premium loading can have a significant effect on premiums in the 3 and 4 figure ranges.


This helps identify not only loadings but also possible exclusions or even when a client may be declined or postponed being offered cover.


Ultimately, my role is to find the company who will treat my client in the most favourable way offering the best terms at the end of the process, not just the best headline premium before application factors are taken into account.

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4. Presentation of Advice


Once research is complete, I provide tailored recommendations. This usually involves:


• A written report or presentation summarizing the proposed cover types, levels, and justifications.

• Explanation of policy terms, potential underwriting outcomes, and any premium considerations.

• A discussion of alternative solutions (e.g., self-insuring certain risks or adjusting cover levels).


The client is encouraged to ask questions and make any necessary adjustments before proceeding.

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5. Completion of Paperwork


Once the client agrees to the recommendations, we assist the client with completing the insurance applications, which typically involve:


• Personal and business financial disclosures (if required)

• Health and lifestyle questionnaires

• Consent for medical underwriting


Typically, this is nowadays all done on-line (thank the Lord – there was nothing more depressing than printing out an application of 30+ pages when the required questions could often have fitted on a double sheet of A4).


This stage ensures that the insurer has all the necessary information to assess the application.

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6. Acceptance of Terms and Supplementary Paperwork


If the insurer offers terms (which may include standard terms, exclusions, or increased premiums), the client decides whether to proceed. This is where the previous legwork I’ve conducted pays dividends as there should be no surprises in respect of the terms offered. If the premium was going to increase or an exclusion was applied on an income protection plan, it would have been known and agreed upon in advance.


Once accepted, supplementary legal documentation is completed, specifically:


Trust Forms – Used for tax-efficient ownership of policies, ensuring the benefits are paid to the correct beneficiaries.

Cross-Option Agreements – A legal agreement between business owners allowing them to buy or sell shares in the event of a shareholder's death or critical illness.

These legal agreements ensure smooth execution of the protection strategy in line with business succession plans.

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Final Steps


Once all paperwork is complete, I confirms the policy is in force and provides the client with policy documents and ongoing support. The client is advised to review cover regularly, especially when business circumstances change. Ordinarily I recommend reviewing business protection plans every other year as the value of a business and the worth of it’s key-employee can change significantly over this period but I ALWAYS recommend my clients contact me at any point if they wish to review their cover before this point.


This structured process ensures that businesses have comprehensive, well-researched insurance solutions aligned with their needs.


If you wish to review appropriate options for your business or even wish for me to look at existing plans then feel free to get in touch via the ‘contact us’ page.


 
 
 

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