IFA Corporate Guide


Insurance – Picking the Right Policy to Protect You When You Need it Most.

Businesses need to ensure they have the right policies in place so should the worst happen they can be put back on a sound financial footing with minimal difficulty.

Protection comes in a multitude of forms covering every aspect of a firm’s daily activities. These include damage, loss or theft of physical assets like buildings, contents, machinery, IT equipment and vehicles, as well external risks such as flooding. Credit and bad debt cover will be required as well as requisite public and product liability insurance to protect against legal action from customers, suppliers or the public. Cover to resolve a dispute such as interruption of production or supply or employment issues may also be necessary. Legal expenses cover, more common in an increasingly litigious age, should take account of any costs or expenses that might be awarded.

Employers’ responsibilities are set down in the Health and Safety at Work Act, but they might also consider potential actions arising from other sources like tax probes courtesy of HM Revenue & Customs, National Insurance enquiries, investigations from Trading Standards and Companies House. Company shareholders and directors face more demanding compliance standards these days with the Companies Act. Those that stand as trustees can be personally liable if they fail in their duties as a trustee, so indemnity cover is also worth exploring.

But trawling through such a multitude of policies and their small print takes time businesses can ill afford. However just as crucial as getting the right cover so you have what is needed, is being clear about what is not included. An IFA is ideally positioned to sift through all the conditions so you get the right cover at the right price.

Employees are a business’ top resource, ultimately driving its success or failure. Therefore it could also pay to assess whether or not other forms of personal insurance should be taken out. For example, some companies rely heavily on a handful of key staff members. If one of these individuals should die, the company may lose profitable contracts, be unable to continue with a vital project or even forced to close. Key man insurance (life assurance taken out by the company on the life of an essential employee) can protect against such threats that could jeopardise the livelihood of many others. Similarly share protection insurance can provide cash at the right time to ensure a company’s shares remain with the company and do not pass to the deceased shareholder’s beneficiaries who may have no relevant experience or knowledge of the business.

Employers can also arrange group life assurance, critical illness, income protection or private medical schemes for employees. These plans pay out to the employee or their dependents in the event of death, serious illness, loss of earnings due to ill health or accident, and can also pay for private medical treatment. Employers who set up insurance for their staff will usually benefit from tax breaks and an IFA or employee benefits consultant can advise on the advantages.

Copyright © 2008 IFA Promotion Ltd.

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