If you want to protect your company against unexpected financial losses, business protection insurance could help. This cover can safeguard your business against issues ranging from legal disputes to loss of income.
In this guide, we explain how business protection works, what it covers, and how to find the best policy and quotes for your business.
What is business protection insurance?
Business protection insurance helps a company keep operating if key individuals become seriously ill, die, or the firm faces unexpected financial or legal pressures. There are several policy types to cover different scenarios.
It provides a financial safety net to maintain stability—whether that means replacing lost profits, funding repairs, covering outstanding loans, or paying legal costs. Unlike personal protection, these policies are designed specifically for businesses.
How does it protect a business?
When you arrange business protection, you are insuring the company against defined financial disruptions. The business pays monthly premiums and, if a covered event occurs, the insurer pays either a lump sum or an ongoing benefit to the company.
For instance, if a key director became seriously ill, the payout could be used to hire temporary cover, repay loans, or help offset reduced revenue.
What does it cover?
Exact cover varies by policy, but most plans protect your business against losses arising from:
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Illness or injury: Financial support if a key person or owner is unable to work.
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Death of a key person or shareholder: A lump sum to replace lost income or fund a buy-back of shares.
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Loss of business income: Replacement of a portion of profits when you can’t operate as normal.
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Outstanding business debts: Helps repay business loans or other liabilities if a director dies or suffers a critical illness.
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Legal disputes: Covers legal costs for matters such as employment claims, contract issues, or property disputes.
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Property damage or interruption: Optional cover for physical damage (e.g. fire, flood, theft, vandalism) and resulting disruption.
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Returning to work: Rehabilitation support to help key employees or owners recover and resume work sooner.
Types of policies available
There isn’t a single form of business protection insurance—there’s a suite of policies designed to address different risks. The core options include:
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Key person insurance: Safeguards the business against the financial impact if a key employee, director, or owner dies or becomes seriously ill.
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Shareholder or partnership protection: Provides funds for surviving owners to buy a departing shareholder’s stake following death or serious illness, helping maintain stable ownership.
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Business loan protection: Covers outstanding business loans or director guarantees if someone essential to repayment dies or cannot work.
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Business income protection insurance: Like personal income protection, it pays a regular benefit to replace part of lost income if the owner or key staff are unable to work due to illness or injury.
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Business legal protection insurance: Pays legal costs for issues such as employment disputes, tax investigations, and contract or property claims.
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Commercial property and asset protection: Often added alongside other cover; protects buildings, stock, and equipment against events such as fire, theft, and damage.
You can arrange each policy on its own or combine them into a tailored package to suit your company’s size, structure, and sector.
How business insurance costs are calculated
The price you pay for business protection insurance depends on several factors, including:
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Type of cover and add-ons: More comprehensive cover or extra options increase cost.
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Level of cover / sum insured: Higher limits mean higher premiums.
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Age and health of insured individuals: Older ages or health issues typically raise pricing.
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Business size and structure: Some policies suit small firms; group risk products often fit larger employers.
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Industry risk profile: Higher-risk sectors (e.g. construction, manufacturing) usually pay more.
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Claims history: A record of previous claims can push up premiums or lead to exclusions.
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Policy features: For group income protection, longer deferred periods or longer benefit periods generally increase premiums.
A specialist insurance adviser can help you strike the right balance between cover and cost so you get strong protection at a competitive price.
Get a bespoke business protection insurance quote online
Choosing the right business protection policy can be tricky because every company is different. Online comparison tools can give a rough guide, but they often miss key details—such as ownership structures, reliance on specific people, or tailored income protection needs.
A business protection specialist can help you to:
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Pinpoint the types of protection your company requires
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Compare the full market of providers and policy features
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Obtain bespoke quotes aligned to your structure and risks
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Secure cover that is both cost-effective and tax-efficient
Best UK business protection providers
The most suitable provider will depend on your business size, sector, and the cover required. To illustrate the market, here are three well-known UK insurers offering business protection:
Aviva: Offers a broad range of policies—key person, shareholder, and business loan protection. Plans can combine life cover with critical illness cover and place strong emphasis on early intervention and rehabilitation to help businesses recover faster from disruption.
Legal & General: Provides one of the more flexible suites of business protection, including relevant life cover and executive income protection. Legal & General states that around 80% of underwriting decisions receive an instant outcome.
Zurich: Supplies key person, partnership, and shareholder protection with flexible benefits. Standard critical illness cover includes 39 conditions, while “critical illness select” increases this to up to 49 conditions. Zurich also enables policies to be written in trust to support smoother ownership transitions and succession planning.
Why do you need business protection insurance?
Running a business always involves risk—from losing a key team member to handling a legal dispute or a hit to income. Business protection insurance offers peace of mind that, if the unexpected happens, your company can keep operating.
Reasons to consider it include:
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Financial stability if a key individual is ill, injured, or dies
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Protection against legal or tax costs
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Safeguarding ownership and control for the future
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Cover for debt repayments and operating expenses
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Support for cash flow in small businesses and limited companies
Without suitable cover, your firm could face financial pressure, forced asset sales, or even closure in severe cases. This insurance helps guard against shocks and supports your business to continue, whatever comes its way.
Frequently Asked Questions
Yes. Business income protection insurance can provide a regular income if you’re unable to work due to illness or injury. This helps maintain cash flow and meet essential business expenses while you recover