Lastest research from leading protection provider Legal & General has found that the majority of small and medium sized enterprises (SMEs) have no key worker protection in place, despite the death of a business owner emerging as the most disruptive potential scenario a business can face.
An investigation into the protection habits of 500 UK businesses commissioned by Legal & General found that death of a business owner was identified as the most disruptive possible scenario by 43%, compared with 23% who specified fire damage and 14% who cited critical illness.
Despite this, 57% of businesses do not have any form of protection to safeguard the business against the risks associated with losing the owner.
The results show 12% of SMEs owners predict their business would cease trading immediately as a result of the death or critical illness of a key worker or business owner.
A further 42% said their business would ultimately cease trading as a result but over a longer period of time. Of these, 25% per cent would expect to cease trading within the first year, 6% within the second year, and 11% after two years.
Legal & General head of specialist protection Clare Harrop said: “Despite almost half of SME owners stating death of a key worker as the most destructive scenario to their business, it’s staggering that only 43% of businesses have actually implemented any form of business protection to safeguard their business in this kind of scenario.
“Cost is clearly front of mind for all businesses in the on-going financial climate, but you never know what lies around the corner. Losing a key worker can have a huge impact on any business, whether from the aspect of sales, turnover or recruitment.”