Around one million businesses across the UK are exposing themselves to serious financial risk through the absence of share protection insurance, according to a joint campaign launched by Legal & General and unbiased.co.uk1. The ‘Every Business Matters’ campaign2 has identified a growing UK business share protection gap of £683 billion, a figure which has increased by 60% from 2011, when it stood at over £427 billion3.
According to the study commissioned by Legal & General, 45 per cent of UK business owners expect the remaining owners to buy their share of the business in the event of their death. Yet despite this, only 40 per cent of businesses have taken out life cover to ensure the funds are available for such a purchase.
This has significant implications for smaller businesses which could find themselves exposed to serious financial and commercial risk in the event of one of their business owners dying, leaving the remaining owners concerned about the future control of the business.
Interestingly, when it comes to succession planning four out of five (81%) SME owners say they would like to pass on their company shares to specific beneficiaries in the event of them passing away, but almost half (44%) are yet to put any legal instructions in place to ensure these wishes are honoured. A further third (31%) have a will in place but have failed to include instructions about their shares.
Further to this, while 56% of businesses across the UK say they have reviewed their Partnership Agreements in the last year, and 59% their Articles of Association, almost half have not (44% and 41% respectively). More worrying still, over a third (35%) of businesses admit they have never reviewed their Partnership Agreements since the business was started, and a further third (33%) their Articles of Association.
Clare Harrop, Head of Specialist Protection at Legal & General says: “Losing a Director or Partner has the potential to cause serious issues for any business. A business owner’s death can lead to disruption in the business and raise questions over ownership at a very difficult time. Business Share Protection is therefore invaluable to any business, ensuring a cash lump sum is available whenever death occurs, enabling the remaining business owner to buy the deceased’s share and retain control of the business. Many business owners are not aware that this type of protection is available and we have made it our mission to raise awareness.”
Karen Barrett, Chief Executive at unbiased.co.uk comments: “Millions of businesses across the UK are exposing themselves to serious financial risk by not having adequate protection to cover their shares. A business owner passing away is not only a personal and emotional loss but it can have a big impact financially and mean the remaining owners have to stump up a sizeable amount of cash very quickly in order to buy the deceased’s share.
“The aim of our ‘Every Business Matters’ campaign is to raise awareness about the growing business protection gap, and communicate the importance of protection to business owners and the business protection market.”
To find out more about the Every Business Matters campaign go to: www.unbiased.co.uk/every-business-matters or follow the campaign using #everybizmatters
To find a local professional adviser go to: www.unbiased.co.uk.
Legal & General’s business protection adviser site: www.legalandgeneral.com/business
Notes to editors
 1,012,520 businesses across the UK that are at risk with no share protection cover = 1 million:
 ‘Every Business Matters’ is a joint campaign launched by Legal & General and unbiased.co.uk, which aims to raise awareness about the UK’s business protection gap and highlight the importance of having adequate protection in place. Conducted between November 2012 and February 2013 amongst 500 respondents, the research analysed the assets, shares and profits of businesses, as well as the attitude of business owners. This research has been commissioned by Legal & General and should be quoted as their research.
 The growing UK business share protection gap:
For more information contact:
Jennifer Stevens/ Emily Falla/ Kate Aitchison, Lansons Communications: 020 7294 3682
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About unbiased.co.uk, the professional adviser search website
Unbiased.co.uk is the UK's most comprehensive free professional adviser search website, focused on empowering users with the resources they need to make better informed financial and legal decisions. We not only help consumers and businesses find the best adviser for their needs from over 25,000 IFAs, financial advisers, mortgage advisers, solicitors and accountants listed on our search but we also help them research the market by providing relevant information and tools. At unbiased.co.uk we like to be transparent about what we do and aim to provide the easiest way for consumers to find and compare advisers meeting their requirements.
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About Legal & General
Alyson Bowcott, PR Manager
Legal & General Group Plc
01737 374443/ 07764 582574
The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As of 31 December 2012, we were responsible for investing £413 billion worldwide on behalf of investors, policyholders and shareholders. We also had over seven million customers in the UK for our life assurance, pensions, investments and general insurance plans.
Legal & General is one of the biggest providers of index-tracking investments in the UK, managing £243 billion as at 31 December 2012.
Legal & General Assurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
The information contained in this press release is intended solely for journalists and should not be relied
upon by private investors or any other persons to make financial decisions.