003 HOW TO PROTECT YOUR BUSINESS – BUSINESS OWNER, SHAREHOLDER, KEY PERSON PROTECTION EXPLAINED

What would happen to your business if you were to die or become too ill to work again? What if a shareholder or key person were to die or become critically ill? Naomi Greatorex is founder and Managing Director of Heath Protection. Her business gives specialist protection advice to clients while working alongside accountants, wealth managers, mortgage brokers and other professional connections as a specialist consultant.
https://heathprotection.co.uk

In this episode, Naomi talks us through insurance policy options for businesses in the growth stage. Critical illness, income protection, life insurance, key person insurance, shareholder protection and trusts explained.

Lisa Conway-Hughes is a Chartered Financial Adviser, a Fellow of the Personal Finance Society and founder of LCH/WEALTH. Lisa regularly posts financial information, education and updates on her hugely popular Instagram account:
https://www.instagram.com/misslollymoney/

Book a one to one Financial Diagnosis with LCH/WEALTH here:
https://lchwealth.co.uk/lch_wealth_services/one-to-one-financial-diagnosis/

This content is to be used for information and educational purposes only and nothing contained in it is or is intended to be construed as individual financial advice. Financial advice must only be given on an individual basis. If you require legal advice, financial advice or any other expert assistance, you should seek the services of a competent and qualified professional.

Show Transcript

Transcript featuring Lisa Conway-Hughes and Naomi Greatorex

Lisa Conway-Hughes: What kind of protection should a business owner have in mind? If something happens to you, the business is gone. Trusts are something people often think are just for the wealthy, but shareholder protection is key. So today, we’re talking about how to protect your business during the growth phase.

I’m joined by Naomi Greatorex, Founder and Managing Director of Heath Protection. Naomi spent much of her career in large insurance companies before setting up her own firm in 2014 to help people get the right insurance from the right provider. Welcome, Naomi!

Naomi Greatorex: Thanks for having me. I think this is a great topic because when we start a business, we have the best intentions to get the right things in place, but as growth kicks in, protection often drops down the to-do list.

Lisa: So where should we begin? What kind of protection should a business owner be thinking about?

Naomi: It really changes depending on where you are in the journey. At the beginning, when the business is built around you as the founder, you need to think about how to protect yourself. If something happens to you, the business could collapse.

Lisa: So, protection starts with you, the founder.

Naomi: Exactly. At the start, we’d look at key person protection—what happens if you get seriously ill. A real-life example: I was on a panel with a lady who ran a PR business. She was diagnosed with cancer in the early days of her business. Thankfully, she had critical illness cover, and her business received a £250,000 lump sum. It meant she could take time off, recover, and keep the business going.

Lisa: So critical illness cover is a must-have.

Naomi: Absolutely. And I’d also add private medical insurance—it gets you treated faster and avoids NHS delays. Both are essential in those early, lean years.

Lisa: And when you start paying yourself a salary?

Naomi: Then it’s time to think about income protection. Only 6% of self-employed people have it, according to stats from Liverpool Victoria. If you’re not working, you’re not earning—so protecting your income is crucial.

Lisa: Can you explain how income protection works?

Naomi: Sure. It’s your own personal sick pay policy. It pays you a monthly income if you’re off work due to illness or injury. It can be set up personally or through your business. The key is that it’s fully underwritten—insurers ask all the health questions upfront. And yes, smokers do pay more—typically about 50% more than non-smokers.

Lisa: What about ex-smokers?

Naomi: Insurers now have a third category: ex-smokers, which covers people who’ve quit within the last five years. Rates vary, but they sit between smoker and non-smoker rates.

Lisa: OK, so I’ve got critical illness and income protection sorted. What about life cover?

Naomi: If you’ve got a limited company, you can take out Relevant Life Cover. It’s paid through your business, it’s tax efficient, and doesn’t count as a benefit in kind. You can insure up to 30 times your salary—including pension and NI contributions. The payout goes to your family via a trust, avoiding probate and inheritance tax.

Lisa: Let’s talk about trusts. Sounds a bit posh!

Naomi: It does, but it’s just a simple legal form that says who gets the money. You don’t need a solicitor, and you can set it up anytime—even on policies you’ve had for years. It’s just a smart way to make sure the payout goes where you want it to go, quickly.

Lisa: Any stories where it’s gone wrong?

Naomi: Yes. A coffee business once valued at £30 million went into administration after one brother died without shareholder protection in place. No clear structure meant disputes, delayed payouts, and chaos. Had they had policies and trusts in place, the family could’ve received the value of the shares, and the business could’ve continued.

Lisa: So, if I’ve got a business partner, we need to discuss what happens to the shares if one of us dies.

Naomi: Precisely. That’s shareholder protection. Each partner is insured so the business can buy the shares from the family if one dies. The family gets money, the surviving partner gets the shares—it’s clean and avoids conflict.

Lisa: And what about as the business grows and I’m no longer the only key person?

Naomi: Great question. That’s when you assess other key people—CFOs, sales directors, anyone whose absence would hurt the business. You can insure more than one person. Also, think about employee benefits like private healthcare or life cover—it helps attract and retain top talent.

Lisa: How often should we review all this?

Naomi: At least once a year. Your income might have gone up, your team might’ve grown, or your business valuation might have doubled. We often find people are still covered based on their startup salaries, which could be far too low.

Lisa: Thank you so much Naomi. This has been incredibly helpful.

Naomi: My pleasure!