Scottish Widows Report Highlights Business Protection Gaps and Opportunities for Advisers

Key Findings from the Scottish Widows Business Protection Risk Report

Scottish Widows, part of Lloyds Banking Group, has published a comprehensive report examining the risks facing UK small and medium-sized enterprises (SMEs) and the opportunities for financial advisers to support these businesses.

Under-Protection and Advice Gap

• Research involving over 2,000 UK business owners found that many SMEs remain under-protected against unexpected events such as illness, death, or the loss of key individuals.
• Only 19% of surveyed business owners currently use a financial adviser, while 70% use an accountant and 30% a solicitor, highlighting the importance of professional collaboration.
• 45% of SME owners have never sought any advice about business protection, and awareness of key products—such as Business Life Insurance and Executive Income Protection—remains low.

Key Risks Identified

• 94% of SMEs rely on one or more key individuals, yet over half are unprotected or unsure if they have cover.
• 32% of SMEs hold commercial debt, with a significant portion secured against personal assets, exposing both businesses and families to risk.
• Only 14% of business owners have a life policy in place to fund share buyouts in the event of a partner’s death, with many unsure how such a purchase would be funded.

Barriers to Protection

• Cost uncertainty is a major barrier, with around half of business owners unable to estimate what cover might cost each month.
• Many SME owners are unaware of the added-value benefits of protection policies, such as access to GPs or mental health support, and do not realise these can often be accessed without making a claim.

Opportunities for Advisers

• The report emphasises that business protection conversations often arise from broader discussions about debt, succession, cash flow, and reliance on key people.
• Advisers are encouraged to partner with accountants and solicitors to provide joined-up advice, particularly as many SMEs lack proactive support from banks or other sources.
• Practical tools and guides are available to help advisers start conversations with business owners and identify areas of vulnerability.

Practical Steps

• Advisers are advised to focus on identifying risks and providing clarity and structure, rather than leading with product details.
• Collaboration with accountants and solicitors can help ensure that legal plans are financially workable and that risks are addressed before they become critical issues.

Methodology

The report is based on a March 2026 YouGov survey of 2,019 UK SME decision-makers, supplemented by 20 in-depth adviser interviews and Scottish Widows’ broader market insights.

Conclusion

With business creation slowing and insolvency rates rising, the need for business protection is more pressing than ever. The research highlights a significant advice gap and underlines the crucial role advisers can play in supporting SME clients’ resilience and long-term success.

For further details, advisers are encouraged to access the full report and supporting client-facing resources from Scottish Widows.