Are your 'key' assets protected?
Could your business be more secure?
Running your own business can be very rewarding but also poses constant challenges such as maintaining profits and retaining your key persons.
In the same way you would protect the financial future of your loved ones, it’s essential to protect your business from any eventualities to secure its financial prospects.
To help you understand the need, the sections below provide an understanding of the key challenges that you and your business could face, and outlines the ways to protect against these.
Key person protection
While most business owners think about protection against risk of physical assets such as key office equipment or vehicles, they often forget to protect their most valuable asset – their people.
Who is a key person?
What do you need to protect?
How does it work?
How much cover do you need?
The amount of protection your business needs depends upon the contribution the key person makes to the company. Shown below are a few ways you can calculate this.
1. Multiple of salary
5 : 10 times key person's annual salary
2. Multiple of profits
2 times average profit over the last 3 years OR
5 times average net attributable profit over the last 3 years
You and your partners are the foundation and driving force of your company’s success. What would happen if one of them dies, suffers from a critical illness or becomes permanently disabled? What would happen to their shares?
How does it work?
Partnership protection ensures that upon the death of a business partner, a cash sum equal to the value of the deceased partner's shares will be paid out to the remaining partner(s).
The money can then be used to buy shares from the deceased's family. However, partnership protection does not enforce the sale of shares. For this, a legal framework* should be set up.
What is a double option agreement?
A double option agreement enforces the sale of shares by either side - the family and the partner(s). This ensures the family is compensated fairly, and the remaining partners can continue to run the business with minimum disruption.
*One possible solution for a legal framework is a double option agreement. We have a draft of this agreement for consideration by your legal advisers, You should discuss your responses with them first to ensure all legal considerations are accounted for. Please contact your financial professional for a copy of this agreement wording.
How a double option agreement and partnership protection work together
Has your company taken out any business loans from the bank? If so, the death of one of the directors or partners could cause the bank to call back the loan, often suddenly. How would you repay the loan?
How does it work?
In the same way that personal protection can repay a mortgage on the death of a property owner, business protection can replay a loan on the death of a business owner, partner or key person.
Sum insured and term = Size and term of loan
Barry and his wife own a shop selling Italian handmade ice-cream which has become very popular among young adults.
They decide to expand the business and open two more shops in prime locations.
To carry out their plan, they need to borrow USD750,000 from a bank over a period of five years. The loan must be repaid should Barry die during the loan period.
His financial professional suggests that they should take out a loan protection policy with a sum insured of USD750,000 and a term of five years.
Should the unfortunate happen, the proceeds from the policy can be used to pay off the loan.
Without the protection, his wife would have to sell some of the assets or even close down the business to repay the loan.
While protecting your financial future is important, we understand you also have a business to run. With the right protection in place, you can focus on growing your business with the peace of mind that your key assets are being protected.
Award-winning products and services
You can count on us to provide excellent service and support while protecting your business.
Our customers have trusted us to protect them for almost 30 years in the Middle East, and that’s why we have won many industry awards over the years, including most recently:
MENA Insurance Review Awards (2015 and 2016):
- 'Life insurer of the Year'
International Adviser Life Awards (2015 and 2016):
- ‘Reader’s Choice Award’
- ‘Best overall product range’
- ‘Best Protection Product’
Strong claims record
Our claims process is quick, efficient and effortless. In the unfortunate event that a claim needs to be made, Zurich will be right by your side – giving you our support, and making sure that all valid claims are paid quickly and easily.
Our Middle East claims record is proof of this:
paid out in protection benefits in the Middle East.
paid out in death claims in the Middle East.
paid out in critical illness claims in the Middle East
Based on claims between Jan 2013 and Dec 2015.
Our strong financial ratings mean you can feel confident that we’ll be able to meet our financial commitments to you and your business.
Agency Rating Outlook Standard & Poor's AA- Stable Moody's Aa3 Stable A.M. Best A+ Stable