The research, conducted by L&G in conjunction with the Institute of Directors, is similar to a survery L&G conducted in 2009 with the British Chamber of Commerce.

The new research, although not directly comparable with the 2009 research, suggests that this gap, at £1.1tn, has not lessened, concerning L&G which said it was “surprising given the economic uncertainty that is still a big concern.”

Over a third of respondents had not taken out cover to protect themselves or their business in the event of the death or serious illness of a key director or business owner despite recognising the threat to their business surviving if it happened.

Approximately 32% of businesses have corporate debt and those companies with 50 or more employees were more likely to have built up debt. More than 43% claimed to have no protection for their corporate debt

Clare Harrop, Head of Specialist Protection at Legal & General said, “Too many businesses still have no cover in place for unexpected events and this poses a huge potential risk for their success and survival. Advisers should do everything they can to ensure that their clients have the protection in place that they need.”

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Bank loans and overdrafts made up approximately 48% of corporate debt. Life assurance was not recommended for almost 58% of those who had a bank loan or overdraft.