Business Solutions – SPHERE ASSURED

SPHERE BUSINESS SOLUTIONS

PROTECTING THE HUMAN CAPITAL

Protection for SMEs and M&A

KEY PERSON INSURANCE

Key Person Insurance is a policy designed for safeguarding a business in the event of the loss of a ‘key’ individual due to death or critical illness. With a key player out, can your business successfully continue to operate as normal? In most circumstances, a business has strong ties to certain team members and with Key Person insurance in place, a business can weather this transition with the input of added financial security from an injection of capital into the business. This addition of capital can be used to offset any lost revenue, help fund the search for a suitable replacement, and alleviate financial strain, allowing the business to make strategic decisions on the future.

Why is Key Person Insurance so important for a business?
The absence of a key person can lead to significant challenges for businesses. This coverage is specifically aimed at individuals whose knowledge, skills, or leadership are crucial to the business’s success, such as owners, executives, or highly specialised employees. The importance of Key Person Insurance for businesses lies in several key areas:

Loss of revenue and profit
Maintaining confidence of clients, suppliers, and investors
Costs for covering temporary or permanent recruitment

SHAREHOLDER PROTECTION

Shareholder Protection is designed to provide financial security and stability in the event of a business owner’s death. With this type of protection in place, businesses can rest assured that the control of the company resides with the remaining company shareholders during periods of transition and financial uncertainty.

Why is it important for a business to have Shareholder Protection?

Ensures company shareholders maintain control
Provides financial security
Helps to prevent competitor influence
Offers fair compensation for the deceased’s family
Encourages a smooth transition

Without a shareholder protection agreement in place, the deceased’s shares will typically pass down to their family, potentially leading to the surviving shareholders losing control of the business.Furthermore, the deceased’s family may wish to become involved in the day-to-day running of the business but often lack the necessary skills and experience to effectively fulfil the required role.
Additionally, there’s also the risk that the shares could be sold on to a competitor. By properly structuring a shareholder protection arrangement, businesses can mitigate such risks and ensure to maintain it’s future security

RELEVANT LIFE INSURANCE

elevant Life Insurance is a type of life insurance policy that companies can provide to their directors and key employees, offering a death-in-service benefit outside of a registered group life scheme.
This type of cover is considered tax-deductible, with the policy paying out a tax-free lump sum to the employee’s beneficiaries if they pass away while employed by the company. While a Key Person policy is designed to mitigate losses for the business, Relevant Life Insurance works for the individual, protecting the employee’s estate with a tax-free lump sum in the event of their death.

Demonstrating a business’ commitment to the welfare of its employees and their families, Relevant Life Insurance can make a business more attractive to potential employees and help retain current staff.

Could your business benefit from Relevant Life Insurance?
The addition of a Relevant Life Insurance scheme can be beneficial for the follow types of businesses and/or individuals:

SMEs that lack enough members for a group life scheme
Directors or high earners who prefer their death-in-service benefit not to be included in their pension lifetime allowance
Key employees whom the company

LOAN PROTECTION

The loss of a person who has guaranteed a loan can have a significantly negative impact a business or the owner’s personal finances. In such circumstances, having Loan Protection in place provides the necessary funding to enable a business to repay any commercial mortgages, overdrafts, or loans. Put simply, the implementation of Loan Protection into a business, acts to ensure the financial security of a business through these difficult transition periods