As a business grows, so does its exposure. The loss of a key person, a long-term staff illness, or an outstanding loan can all threaten continuity. Yet business protection is one of the most overlooked areas of cover: many SMEs that insure their premises and stock have nothing in place for the people the business actually depends on. Here are five forms of cover worth reviewing as your company develops.

1. Key person insurance

If losing a particular director or employee would seriously dent your revenue, key person cover pays the business a lump sum to absorb the shock: funding recruitment, replacing lost income or profits, and reassuring lenders, customers and staff while you recover. It's typically arranged on the life (and often critical illness) of the individual, with the business as the policy owner and beneficiary.

2. Group income protection (employee sick pay)

Long-term staff absence is costly and unpredictable. Group income protection continues an employee's income during extended illness, funded by the insurer rather than your cash flow, and usually includes rehabilitation and early-intervention support to help people return to work sooner. It also signals a genuine duty of care, which matters for recruitment and retention. Group protection products paid out billions to employees in 2024, underlining how heavily claims do get used.

3. Employee life insurance (death in service)

A valued, tax-efficient benefit that pays a lump sum (typically a multiple of salary) to an employee's family if they die while employed. Employer premiums on a registered scheme are usually an allowable business expense and not treated as a taxable benefit-in-kind for employees, making it a cost-effective way to attract and retain talent. It's often the cornerstone of an employee benefits package.

4. Business loan protection

If your company carries loans, overdrafts, commercial mortgages or directors' loans, this cover ensures those debts can be repaid if a key individual dies or becomes critically ill: preventing a lender from calling in borrowing at the worst possible moment. Lenders themselves sometimes require it as a condition of advancing funds.

5. Relevant life cover

Ideal for small companies and directors, relevant life cover provides individual death-in-service style protection funded by the business in a tax-efficient way: useful where there are too few staff for a group scheme. Premiums are usually an allowable business expense with no benefit-in-kind charge, and the payout is written in trust outside the individual's estate.

One more to consider: shareholder and partnership protection

If your business has more than one owner, share or partnership protection deserves a place on the list too. It provides funds and a pre-agreed arrangement so that, if an owner dies or becomes critically ill, the remaining owners can buy their share: keeping control of the business with the people running it, rather than passing to a deceased owner's family who may not want to be involved.

Why it's worth reviewing now

Protection isn't only about disaster recovery: it underpins confidence. Lenders, investors and key staff all take reassurance from knowing a business can withstand the loss of a crucial person or a sudden debt becoming due. Health and protection insurance also keeps people in work: industry analysis credits these products with preventing millions of lost working days each year through early intervention and rehabilitation.

How the cover is owned and set up

The way a policy is arranged is as important as the cover itself. Key person and loan protection are usually owned by and paid for by the business, with the business as beneficiary. Share and partnership protection typically pairs life and critical illness policies with a cross-option (or "double option") agreement and an appropriate trust, so the surviving owners have the right to buy and the departing owner's family the right to sell: at a fair, pre-agreed value. Getting this structure right is what makes the money arrive in the right hands at the right time.

What it costs

Business protection is often more affordable than owners expect, particularly for younger, healthy lives, and premiums for term-based cover are broadly comparable to equivalent personal policies. The cost depends on the individuals covered, the sum assured and whether critical illness is included. Set against the financial damage these policies are designed to prevent, the premium is usually modest: but it should still be reviewed as the business changes.

Where to start

You don't need everything at once. The right mix depends on your size, your borrowing, and who your business depends on most. A practical first step is to identify the people and debts that would cause the biggest problem if something went wrong, then cover those first. An adviser can help you prioritise based on your specific risks, and structure policies and any trusts correctly. Tax treatment depends on individual circumstances and may change.