What being ‘unprotected’ means for accountants’ clients

05 November 2026

New research, conducted by YouGov among 2,019 UK business owners on behalf of Scottish Widows, exposes the extent to which SMEs rely on a small number of people to generate income, service debt, and drive growth. And that reliance leaves those businesses exposed in ways many owners, shareholders and partners either don’t fully understand or are not aware of. The insurer wants to see that knowledge gap bridged and says accountants have a key role to play. 

Summary of Scottish Widows research findings: 

• The majority (94%) of UK SMEs say their business survival is dependent on one or more key people. 
• Nearly a quarter (23%) would only be able to continue trading for a maximum of one month if they lost one of those key people. While 38% have no business continuity plan. Even where plans exist, one in four do not cover the health or loss of key people. 
• One in 10 firms would cease trading immediately if the business owner became incapacitated due to illness, underlining the potential impact that the loss of a key individual can have on business continuity. 
• Almost a third hold some form of commercial debt, and among those 29% hold between £100,000 and just under £1 million. Yet evidence of funded repayment plans is scant and many wrongly believe their personal insurance and assets will cover their business risks. 
• 15% of surveyed businesses with commercial debt say repayment depends on a personal guarantee, while 9% say debt is linked to personal assets. Many business owners assume the debt would simply stay with the company. In reality, if borrowing is linked to personal guarantees or secured against personal assets, it can leave families exposed. 

More than 1.3 million micro and small businesses operate across the UK, Scottish Widows says many of those owners are unaware of how vulnerable their business and, by extension, their family life may be if they or a key member of staff were unable to work for an extended period of time. 

To help raise awareness of the issues Scottish Widows has produced an educational guide for business owners, Unprotected: The hidden risks facing small businesses (PDF, 2MB), which covers the business risks and options for mitigating those risks. The insurer hopes the guide will help start some much-needed conversations on the subject. 

And it says accountants have a key role to play in making sure those conversations happens. 

Catherine Trimble, Head of Distribution, Protection at Scottish Widows, says: “When you review a client’s accounts, you are not just looking at what has happened. You can often see where future pressure might come from too. Annual accounts reviews, new finance, expansion plans, succession discussions or business valuations can all open the door to a protection conversation. So can signs of pressure, such as an owner carrying too much responsibility. The question is simple: what could derail the client’s plans, and have they planned for it?” 

“Are your clients’ profits or cash flow heavily reliant on one or two people? Do they have loans or personal guarantees tied to an owner or director? Is there a second-in-command who could step up if the owner had to step back, or would business grind to a halt? These are not abstract risks. Revenue can fall, debt repayments can come under pressure, and growth plans can stall. For many clients, you may already see the warning signs in their accounts.

That gives you a natural way to start the conversation. You are not straying into unfamiliar territory. You are helping the client connect what their accounts show today with what could happen if those pressures are felt,” adds Trimble. 

Scottish Widows advocates for Business Protection insurance to help provide money when illness, injury or death creates a sudden income gap in the business, whether that means stabilising cash flow, repaying debt, or bringing in temporary support. 

The insurer sees accountants’ role as helping to spot the risk early and encouraging their clients to explore options for mitigating the risk with a specialist adviser. 

Trimble says: “Raising these questions is not about stepping outside your role as your client’s accountant. It is about helping your clients connect the numbers you already see with the risks they may not have planned for. If protection is needed, a qualified adviser can help them explore the right options. Your role may simply be spotting the risk early enough for the client to act.

And based on these findings, action does need to be taken. Business protection cannot remove every commercial risk. But it can help owners plan for the risks that sit behind the business: the people, debt and ownership structures it depends on.”

Download full press release (PDF, 165KB)

Notes to editors

Business protection keeps the business running if the worst happens. For example, the right cover can:

• Repay business loans so the family’s home isn’t at risk. 
• Protect profits if a key person is lost. 
• Fund share buyouts so families receive fair value. 
• Prevent a forced sale of the business. 
• Protect a key person’s income if illness or injury leaves them unable to work. 
• Cover wages or recruitment costs during long-term absence. 

Awareness and understanding of the difference between personal and business insurance is low. The educational guide is intended to address that.

Methodology

Online survey conducted in March 2026 by YouGov on behalf of Scottish Widows. 2,019 UK business owners completed the survey. Businesses ranged from being in their first year of trading through to having a turnover of over £1m.

About Scottish Widows

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With £303bn in total assets under administration and more than 6.5 million customers, Scottish Widows’ award-winning product range includes workplace and individual pensions, annuities, life cover, critical illness and income protection, as well as savings and investment products.

Scottish Widows has more than 1.75m digitally registered customers. The Scottish Widows Platform is trusted by financial advisers as the home for the pension and investment assets of more than 170k clients.