Most small businesses are failing to insure their key employees, according to research from Royal London.
A study of 732 SME owners revealed that only 26% have insurance covering the key people in their business.
Key person cover could help SMEs deal with the impact of losing the most valuable people in their business by providing a lump sum payment if a key person dies or is diagnosed with critical illness.
According to the research, 3 in 10 SMEs have experienced the loss of a key employee for 3 months or more due to a serious illness.
However, of the decision-makers who have heard of this type of insurance, 51% do not think the policy is important.
Ian Smart, product architect at Royal London, said:
"People are the most valuable asset of any business, but SMEs are more likely to insure their premises and stock than their key people.
"Senior decision-makers at SMEs need to find out more about business protection insurance from their financial adviser to help insure the future of their businesses."
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