What is business income protection?
Business income protection is designed for company directors, business owners, and key employees. If illness or injury stops them working, the policy pays a regular income to the business — helping cover overheads, salaries, and fixed costs so operations can continue.
It's different from personal income protection because the business owns the policy, pays the premiums, and receives the payout. That makes it an efficient way to protect both the company and the key people behind it.
Types of business income protection
- Executive Income Protection — covers an individual director or key employee. The business pays the premiums and receives the payout, then pays the employee through PAYE.
- Key Person Insurance — protects the business if a vital team member can't work, helping cover the cost of recruiting and training a replacement.
- Business Overhead Protection — specifically designed to cover ongoing fixed costs like rent, utilities, and supplier payments while a key person recovers.
How does it work?
- The business takes out the policy and pays the premiums — typically a deductible business expense
- You choose the level of cover, the deferral period (waiting time before payments start), and how long the policy pays out
- If the insured person can't work due to illness or injury, the policy pays a monthly income directly to the business
- Payments continue until they return to work, the policy term ends, or they reach retirement age
Who needs business income protection?
If your business depends on a small number of key people — directors, founders, specialist staff, or owner-operators — business income protection is worth serious consideration. It's especially valuable for limited companies, partnerships, and SMEs where one person's absence could significantly disrupt operations or revenue.
