Business owners have worries that many other people don’t. Instead of working in return for a reliable salary, they’re relying on finding customers and clients, developing market share and building a strong team to deliver results.

There can be a lot of risk associated with being a business owner, and here are a few ways you can protect yourself.

Emergency fund

When people are relying on you to pay their wages, it’s important that you don’t run out of money.

Aim to build up an emergency fund that’s equal to about three to six months of your business’s earnings that you can call upon to get you out of a tight spot, such as an unexpected repair or a drop in business.

If you have business debt, you may be able to structure this so that your emergency savings offset what’s owed but are still available to you if needed.


There a range of insurance products that are designed specifically to offer protection for people in business. Key person insurance is an important one, which acts like income protection to help pay for the cost of replacing an important person if they were out of work for a period of time.

Liability insurance is also important, covering things such as your business negligently causing a loss to someone else or unintentionally breaking the law. Keep in mind that some costs are limited, depending on what law is broken (H&S for example has some limitations).

You might also want business interruption insurance, which takes effect if you aren’t able to open your doors due to something such as equipment damage, vandalism or a natural disaster.

Lastly, you might also want cover for your business’s premises and equipment, depending on how much your business relies on these to make money.

Shareholder agreement

It’s great to have partners in business but, as with any relationship, it’s important to set out clear expectations from the outset.

A shareholder agreement is a bit like a prenuptial agreement in that it sets out how different scenarios will be handled. It can be called upon when one shareholder wants out, or where there’s a dispute. It usually covers things like how the business will be run, the rights and responsibilities of everyone who owns shares and how borrowing will be arranged.

It might also look at the value of shares and how a director or shareholder could be removed – and whether a non-competition clause is needed. Alongside this, you might want to consider shareholder or partnership protection which provides one shareholder with the money to buy out another should something happen to them.

Have contracts and terms in place

Don’t just rely on a handshake or the good relationship you’ve built up with clients and suppliers. Get agreements in writing and make it clear what you’re expecting, and by when. Don’t go too easy on quotes for work for friends and family – they should be supporters of your business, not a drain on your business finances or your expertise.

We can help

Whether you’re just starting out in business or have been in it for a while but are just now thinking about your vulnerabilities, give us a call. We can talk through the various insurance options available to you and what might be the right fit for your firm.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.