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Only 21% of companies have keyperson cover

A staggering 79 per cent of UK businesses risk financial ruin because of lack of insurance, according to research by Legal & General.

Its business intentions research into levels of awareness and take-up of business protection among decision-makers, such as owners, managers and directors, found that every company has at least one person vital to the firm while 71 per cent have two or more.

But only 21 per cent of firms have keyperson insurance while 42 per cent have no business protection and do not know what it is.

L&G says the research highlights that there are many opportunities for IFAs to raise the issue of business protection to their corporate clients.

The research comes as L&G launches an immediate cover facility for business protection plans offering term insurance with up to £2m sum assured and term with critical-illness cover up to £500,000 sum assured.

Protection director Ronnie Martin says: “While it is likely that some keypeople could be absent for around 90 minutes on certain days in June, can you imagine the impact on their businesses if this absence was permanent? Our research tells us that over 50 per cent of companies could close within 11 months of the death or serious illness of a keyperson.”

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