From “it won’t happen to me” to “we’ve got a plan”

If you advise owners or directors of SMEs, the biggest unserved need in your client bank could be hiding in plain sight. The UK has 5.5 million small businesses employing 12.9 million people^1, yet business protection penetration remains tiny compared with individual protection. That’s a sizeable gap—and a duty of care moment for advisers who want to grow, retain, and genuinely derisk clients.  

Why now—and why you?

52% of business owners say the No.1 risk to their firm is the death of an owner/key employee; 59% say they would stop trading within a year of such a loss; and 63% have never considered—or don’t understand—business protection². Meanwhile fewer than fewer than 3 in 10 small business owners actively seek financial advice.3 Translation: the demand is there, the proactivity isn’t—and trusted professionals who start the conversation will win.  

But language matters. Instead of opening with “key person insurance”, talk continuity and succession. Make it personal: what happens to the business and the family if a key person dies or is critically ill? Then show—don’t tell—using two simple tools you can run live in meetings.  

Tool 1: The Risk Assessment
 

Step 1 – Map impact vs probability (the “spot the X” moment)

Draw the 2×2 chart and ask the owner to place an X for events like fire, flood, Bad advice, IT issues, Public liability​, Employer’s liability​ 

And then - crucially- loss of a key person/owner. Most will put fire in “low probability / high impact.” Then ask where “Director/Owner illness or death” sits. The penny drops when they realise they insure premises - but not the people who generate cashflow.  

Step 2 – Quantify the probability.

For a five director business with average age 40, the probability that at least one dies before 65 is around 16%; the probability of at least one critical illness before 65 is 39%.⁴ Numbers like these are hard to dismiss—and they anchor the advice in risk reality, not sales rhetoric.  

Keep the chart and the table visible throughout the meeting. You’re not “selling protection”; you’re facilitating a board level risk discussion that ends in a documented continuity plan.  

Tool 2: The Liability Audit

This is the moment the conversation becomes practical and priced. Build a simple column for each key person and capture four lines of numbers together with the client: 

1. Liabilities to third parties (overdrafts, loans, PGs) - banks don’t automatically cover this lending with life cover as a minimum. The reason - the corporate lending managers think these businesses have advisers who are providing the cover. The advisers on the other hand think the banks are doing it. IN REALITY, no one is doing it so this is a great starting point in a business continuity planning exercise. 
2. Liabilities to owners (directors’ loans—remember: typically repayable on death to the estate) - If that business doesn’t have any available cash, what happens?... That’s right - something as small as a director’s loan not being repaid could have a huge impact on the survival of that business. 
3. Loss of profit × time to recover (gross profit attributable to the individual, multiplied by realistic recovery time) - We’re looking here at gross profit. You have to determine how much of that gross profit is attributable to each person, and don’t worry it’s not an exact science. The next step - we take the gross profit amount for each key individual and times that by how long it would take to replace them, whether it be, six months, 12 months, 18 months, or longer. 
4. One off expenses (recruitment, “golden hello”, salary cushion, advertising, etc.)

You now have a visual, owner validated funding requirement. That clarity lets you shape the solution (life/CI, term lengths, ownership structures) with far less friction— Accountancy firms love this and we see huge success in the referral market where this is used. 

Case study: bringing the tools to life

Consider Johnstone & Pearson Ltd, Gross Profit last year £1.25m, owned by Charles Johnstone and Dan Pearson, with senior salesman John Smith. Start with the liability audit: two bank loans (£250k and £150k), an overdraft used to £100k, and directors’ loans (£120k and £100k). Then attribute gross profit (£240k each to Charles and Dan; £120k to John) and agree recovery periods (18 months for the directors; 12 months for John), plus one off recruitment expenses (£50k per director; £25k for John).  

From there, structure the cover columns: 

•  Debt/overdraft cleared proportionately on first death/CI (e.g., half each for the owners). 
•  Directors’ loans covered “to age” (so estates are paid without draining working capital). 
•  Loss of profit + one offs determined by the agreed figures above. 

When the owners ask, “Isn’t this expensive?”, bring it back to business metrics: the comprehensive Scottish Widows Life and Critical illness solution equated to 2% of gross profit⁵ - a fraction of what they already spend insuring premises, vehicles and contents with a far lower probability of occurrence. That reframes cost as sensible cashflow protection.  

Make better conversations, not longer ones

Lead with wants, not products. Ask:What do you want to happen to your shares if you die? Would your spouse want to keep or sell? Would surviving owners want immediate cash to buy back control? Language that mirrors owner psychology creates momentum.  

Be the team leader. Position yourself as the coordinator across the accountant (numbers), solicitor (agreements/trusts), and lender (covenants and PGs). Owners value a single point of leadership when turning a risk conversation into paperwork and policies.  

Use readymade starters. Simple prompts open doors: Do you have deathinservice? Who are the three people you’d “take across the street” if you restarted tomorrow—and what happens if one isn’t there? Are any loans dependent on specific people?  

Close with a fourstep plan

1. Identify who’s key. 
2. Quantify financial risk (risk table + liability audit). 
3. Create and explain the solution. 
4. Implement with the client’s professional connections—and diarise annual reviews. 

Where the business comes from

Start with your own client book: directors, partners, consultants in SMEs. Then lean into professional connections—accountants, solicitors, commercial lenders—who have clients with uncovered risks and no adviser. Offer reciprocal value (succession forms, liability audits, board education sessions) and you’ll see a pipeline of qualified introductions, not cold leads. 

The takeaway

In uncertain times, cash equals control. Your role is to turn an abstract “what if?” into a funded, documented plan owners can feel and see. Do that—using the Risk Assessment and Liability Audit—and you won’t just write more business protection; you’ll deepen relationships, differentiate your proposition, and materially improve client outcomes when it matters most.

Sources:

¹Gov.UK, 2024

²State of the Nation report, 2021

³Gov.UK, 2025

⁴Business Risk Calculator, 2025 

⁵Scottish Widows Life and Critical Illness quote, 2024