63% of small, family-run businesses would not survive the loss of a key member of staff
Almost two-thirds (63%) of small, family-run businesses would not survive the loss of a key member of staff due to ill health or death, according to new research by Scottish Widows.
The findings show that more needs to be done to educate small businesses about the risk of losing key staff members, said Iain McGowan, Head of Savings and Protection at Scottish Widows.
The Scottish Widows Business Protection Report, which details research carried out with over 500 UK business decision makers, shows that the majority of businesses are still reluctant to protect themselves from the unexpected loss of a business owner or key member of staff. By their nature smaller businesses are more exposed to certain risks and in particular the loss of a key player.
Despite this, 60% say they do not think they need a protection policy in place. And the research also shows that only 6% of UK businesses have financial protection to cover the death of key person while only 4% have protection for a key person suffering a critical illness.
Iain McGowan, Head of Savings and Protection at Scottish Widows commented: “Small businesses are the lifeblood of the UK economy making up 99% of the private sector. Even in these challenging economic times today’s entrepreneurs must be prepared for the financial impact that a critical illness or death of a key employee could have on their business.
“Businesses need to consider the key risks they face to all aspects of their operation. This includes planning for the very real risks their business could face from death, critical illness, or long term incapacity of a key employee or business owner. While small businesses receive assistance and advice when starting up, they also need help in taking a long term financial view of their business and plan for potential risks.”