Ask the Expert: How can I make sure my business keeps going if I have an accident and can’t work?

August 1, 2012

This is obviously a concern for many smaller businesses, particularly sole traders, who fear that their business would not be able to continue without them, writes Milsted Langdon.

However, how many people have actually put any sort of plan into place?

Most people would rather not think about what will happen if they are no longer able to work, but being prepared for the worst is the key to business survival. For example, a family business could be left without anyone to run it in the event of a sudden and unexpected illness, accident or, in the worst case, death. It can take months for a court to grant authority to appoint someone else to take charge, in which time day-to-day operation of the business can become impossible.

So what steps can be taken to prepare for the unknown? One important aspect to consider is key man insurance. This provides a safety net should a major shareholder, loan guarantor or employee with specialist skills and knowledge be lost, ensuring the business survives the transition period. It also proves to investors and business partners that the company can afford to and makes the time to insure its valuable assets, which is especially important for smaller businesses looking to grow through partnerships. Both the company and the named individual benefit from this insurance, and should the business receive a death benefit from the policy, it will be considered tax-free.

If you have a business partner or co-own your company then it is certainly worth considering taking out partnership/director share purchase cover, which protects both families and co-owners in the event of the death of a director or partner.

You also need a contingency plan to ensure continuity of the business, so that your customers continue to receive the service they have come to expect and your staff feel secure in their jobs. With this in mind, it is worth considering who your key personnel are. Whose skills could your business not cope without? Who else in the company could carry out your responsibilities in your absence? It may be worth investing in additional training for certain staff you feel have the potential to oversee the running of your company when you are not there.

At Milsted Langdon, our Legacy Services team are experienced in providing bespoke advice to business owners on such matters and can help you develop and implement a robust contingency plan, including identifying your key employees. We can also ensure that important information about your financial and business affairs can be accessed and managed quickly and efficiently in the event of an emergency. Additionally, our Financial Services team can also advise on the most suitable insurance cover for your circumstances.

Remember, while it is easy to think ‘it won’t happen to me’, there is no way of knowing what lies around the next corner. However, that does not mean you cannot be prepared for every eventuality.

For further information, please contact Simon Denton at or visit

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