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ScotProv warns SMEs on need for protection

Small to medium-sized businesses are overlooking the need for protection insurance at their peril as they would be most damaged by the loss of a key employee, Scottish Provident has warned.

The company says there is a definite need for SMEs to take protection such as keyperson or employer liability insurance more seriously.

More companies are making provision for their employees through benefit packages but few think about the long-term effects of losing a key employee.

ScotProv suggests that IFAs active in the SME market should ask clients to make a list of events which could negatively affect their businesses, ranking them in order of financial impact, and then consider which of these events they have insured against.

ScotProv says once this exercise is completed, it is easier to convince clients of the importance of setting aside a fraction of monthly costs for life and critical-illness cover.

Head of marketing and product development Nick Kirwan says: “Protection is not just for people with mortgages. People running their own businesses need protection for exactly the same reasons as individuals.

“A death or critical illness will severely affect how that business can perform but it is clear that very few firms understand the scale of the threat or the solutions available to minimise the impact.”

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