Top insurance policies for company directors

Insurance is perhaps as important today as it’s ever been, but with so many types to choose from knowing which can benefit you and your business can be difficult.

In this article, we look at some of the top insurance products for company directors and explain how you can get free advice from an FCA approved broker.

insurance policies for company directorsTypes of protection policies

There is a range of different policies on the market today but the ones which are most valued to small businesses are:

  • Relevant life insurance
  • Company health insurance
  • Keyman insurance

Relevant life insurance

Relevant life insurance is a type of death-in-service benefit that is set up and paid for by a company, rather than by the individual. It can be provided as a benefit to employees or as a tax-efficient way to provide life insurance to company directors. Thanks to a variety of HMRC-approved tax reliefs, savings in comparison to a personal policy can be as high as 50%.

The benefits of relevant life insurance:

  • Microbusinesses of 1-2 people can qualify as long as they are a limited company.
  • Small businesses can benefit from similar tax efficiencies that larger businesses enjoy.
  • It’s a desirable benefit which can help attract and retain members of the team.
  • Individuals receive life insurance without having to pay any premiums.
  • Benefits high earners as it doesn’t count towards the annual pension lifetime allowance.
  • It reduces a companies corporation tax bill as it is a company expense.

Company health insurance

Company health insurance or small business medical insurance as it’s also known is an extremely desirable employee and director benefit that more and more companies are turning to. As this article is written we’re in the middle of the Covid-19 pandemic and routine operations are being postponed en masse by the NHS. With that, company directors are increasingly turning to private health insurance to ensure that should they or their team become unwell, they can receive prompt treatment. Unlike relevant life insurance, company health insurance is a P11D benefit in kind, meaning that directors and employees that have it will need to pay tax on it each year, but that doesn’t detract from the extensive benefits.

The benefits of company health insurance:

  • Be seen faster and avoid delays on NHS waiting lists
  • Be treated at a time and place of your choosing
  • Have more of a choice over who provides your treatment
  • Access to drugs and treatments not available on the NHS
  • A private room while you’re in the hospital

Keyman insurance

In a small business, everyone counts, especially the directors, so if you’re suddenly without one of the key players, it can make trading difficult and sometimes impossible. It’s for that reason that insurers have created a policy called Keyman Insurance that pays out in the event that a key employee or director can’t work for some reason. Keyman insurance doesn’t only cover the death of the person in question, it can also cover their absence due to serious illness

The benefits of keyman insurance:

  • Provide a buffer against loss of profits
  • Pay for recruiting and training a replacement member of staff
  • Repaying outstanding loans
  • Making up for the loss of important personal contacts
  • Assistance with loss of confidence from supplies and customers

Free insurance advice

As a small business owner, you’re expected to understand a lot of things with insurance just being one of those. It can be difficult to keep up with the products that are available and make sure you’re not only well protected but that it’s also financially efficient too. It’s why we always suggest speaking to an independent broker about your companies insurance products as they will be perfectly positioned to provide you with bespoke advice.

myTribe Insurance is one of the UK’s leading business insurance brokers working with hundreds of companies and directors each year to ensure they’re protected for all eventualities. To find out more or to speak to them about your company, please click the link above.