If you’re a business owner, you’ll be used to protecting your physical assets, such as buildings and vehicles, but it’s important to protect your people risk too.
This is a true story that demonstrates the real risks of overlooking the protection of the key people within your business. It is of a successful businessman whose situation tragically changed overnight.
Coming home from a football match in 2007, the businessman, along with his son and two others, died in an accident.
The business he co-founded had been built up over 15 years and had grown to a market value of £500 million. With a personal stake in the business worth c.£100 million, it would seem that he and his family were financially secure.
Despite this success, one thing his company had failed to do was protect its future, by taking out some form of life assurance on him. Following his death, a number of profit warnings were issued and the share price of the business crashed from a high of £12.75 to 85p, before being suspended.
Ultimately, the banks lost confidence in the business and the administrators were called in. This was a negative situation for everyone concerned - unsecured creditors received pennies in the pound, most of the workforce lost their jobs and the c£100 million shares he left to his estate had very little value, creating further angst for his family. Like many of us, he didn’t think it would happen to him.
If you are a business owner, it is well worth considering the people risks within your business. If you’d like further information or advice in this area, please visit www.jelfgroup.com/page/business-services/business-protection.
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