Companies fail to properly protect their businesses because they remain unaware of the impact death or critical illness could have, according to research by Skandia.
A survey of more than 500 advisers shows 78% call a lack of awareness of the impact such events could have, the biggest barrier to companies taking out adequate business protection.
Almost 50% attribute entrepreneurs failing to take out insurance to knowing little about the likelihood of the events occurring followed by the same number who attribute it to cost perception.
A total of 30% believe business see actual cost as a barrier to fewer businesses than cost perception. Skandia says this suggests companies me find life and critical illness protection more affordable than they think.
The survey also asked advisers what features they see as most important in selecting a business protection provider. Half call service quality the most important, followed by illness range covered and price. Advisers also consider rates of claims paid and direct access to company underwriters as important.
Ian Brown, head of protection marketing at Skandia, says: “It’s lack of knowledge that business protection really exists. If you’re a company director there are a lot of things visible that need insuring, cars, buildings, computers; they have to be insured by law. They’re physical so they make sense. But there’s nothing that says you’re the most valuable commodity to you business.
“There’s an awful of advisers who have businesses as clients. Maybe they’ve segregated that. There’s an opportunity to look at people they’ve done mortgages with to see if you can talk about business as well.
“If they’re not quite so busy as they were in protection because mortgages have been so up and down, this gives them a new avenue to explore.”
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