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.”
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.
