1. Welcome to ‘The Business Partner,’
the informative and - we hope,
thought-stimulating publication by
Hammond Business Partners.
Hammond Business Partners was
set up in 2014 by the Directors of
Hammond Professional Indemnity
Consultants, a Professional Indemnity
Specialist Broker and Risk
Management Consultancy.
Managing Director David Hedgecock
emphasises that the move was in
response to client demand. “Although
Hammond PI has close links with
financial service providers, we found
we were receiving an ever-growing
number of enquiries from Hammond
PI clients for advice on Business
Protection matters, so we set up a
new dedicated business, Hammond
Business Protection, to provide the
best service possible to these clients,”
he said.
“Increasingly our commercial clients
recognise the need for Income
Protection, both for directors and
staff. Equally though, they want to
ensure the continuity of their hard-built
business should ill-health or even death
cause them or their key personnel to
be lost to the organisation.
This publication will look at typical
business scenarios and the
opportunities available to businesses
in such circumstances, and importantly,
it will also identify the strengths and
weaknesses that await businesses
who fail to embrace Business
Protection.
Who would you be lost without?
In the same way that most people
insure their houses and cars but not
their lives, small business owners tend
to insure the physical assets they
consider to be vital to the continuity of
the business - things like building
premises, stock, machinery and
equipment. What they don’t do
however, is insure the people who
make their businesses work.
Think about your ‘key’ employees,
and that includes you, the owner! They
could be product developers, sales
people or finance directors. Whoever
they are, these individuals possess the
skills, experience and relationships
that make your business work, and the
smaller the business, the greater the
knock-on effect of their loss can be.
The impact on your business might
include:
• Emotional impact on remaining staff
• Increased workloads
• Negative impact on morale
• Loss of confidence by creditors
• Increase in business debts
• Disruption of development plans
• Reduced income and/or profits
• Loss of important contracts
• Change of shareholder control
• The business ceases to trade
The
Business
Partner
The newsletter of
Hammond
Business Partners
Hammond Business Partners will help business
owners recognise where their vulnerability lies and will
help them devise insurance backed solutions coupled
with a healthy and successful business ethos.
“
”
Keep your business safe
2. There is a tax-efficient and
cost-effective way for employers to
provide life cover to both its directors
and other employees. A relevant life
policy can save you up to around 50%
- due to NI and tax relief - compared
to an ordinary life policy, and offers
the following benefits:
• Cash lump sum payment for terminal
illness as well as death
• Tax efficiency – not a P11d benefit
so tax or national insurance
contributions on the premium
• On payout, the cash lump sum is not
subject to income tax or IHT
• It doesn’t count as a retirement
benefit so won’t affect lifetime
allowances.
Relevant Life Policies
Many larger companies offer their
employees a ‘death in service’ benefit,
paying the employee’s family a lump
sum if the insured person dies in their
employment.
Whilst being fully tax deductible and
a tax free benefit to the directors and
staff, this kind of benefit doesn’t suit
every company and specifically
doesn’t suit those which may be too
small for a group arrangement. Such
large schemes can also be unsuitable
for an employer who wants to tailor
benefits to match the most valuable
employees or senior personnel.
Another very important factor to
consider is that high earners in the
business may have large pension
pots. In these cases, a ‘death in
service’ benefit would take them over
their lifetime allowance.
Vitality is a relevant life policy
through Hammond Business Partners
via Vitality Life, which offers small
businesses an employee benefits
package including incentives to live
more healthily. Healthy employees:
• Are more engaged
• Take less time off sick
• Are more productive
The Vitality healthy living
programme includes:
• 50% off monthly gym membership
• Free cinema ticket every week
• 50% off Nuffield health screening
• 75% off Champneys spa breaks
• Up to £100 cash back every year
• Ability to reduce protection premium
each year of the policy
• And many more.
Hammond Business Partners
Beech House, Pinewood Business Park,
Coleshill Road, Birmingham B37 7HG.
Tel: +44 (0) 121 788 3444
Email: info@hammondbusinesspartners.com
Web: www.hammondbusinesspartners.com
Hammond Business Partners are authorised and regulated by the FCA.
All efforts have been made to ensure the accuracy of this guide, which
is intended to provide general information only and should not be
construed as specific legal or financial advice. Individual circumstances
must be taken into account when obtaining insurance cover.
As part of our exclusive agreement with Vitality Life (formally Pruprotect), we can offer you and
your key employees the most comprehensive Life and Serious Illness Cover available in the UK
market. Serious Illness Cover works on a severity basis and covers up to 166 conditions. Whilst
some of these conditions may not be critical, a partial payout to the business is often useful at a
time when the key person is away from work. This will increase flexibility over the speed of their
return, thereby reducing pressure on both the key person and the business.
What can you do?