If you or your business partner were to become ill, injured or pass away, could your business continue? You may be liable for your partner's share of the business and debts in addition to your own. Insurance payments can be used to repay any outstanding debt.
If the business is a limited liability company the directors/shareholders are often guarantors for the loan and the loan documentation can require the guarantors to be jointly and severally liable for the debt. This means each guarantor is liable for the full amount of the debt.
Business Debt Protection Insurance can be put in place for the repayment of debt to mitigate the risk of personal assets being placed at risk or the business being put at financial risk.
The purpose or intention of this insurance cover is to provide the business with funds, so that it can repay those borrowings on the death or disablement of the working shareholder or director, and release of any business-related personal guarantee or charge over personal assets given by that person.
Do you think you require this protection? Click on the below link to complete our self-assessment: