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How to write Business Protection in trust

How you write business protection depends on:

  1. What the cover is for
  2. The set-up of the business
  3. Who the claim would be paid to

Relevant Life Cover

Relevant Life Cover must be written in trust. The employer is automatically a trustee and up to four additional trustees can be named – one of these can be the employee. The employee will select their beneficiaries (usually their family or next of kin).

You can use our Relevant Life Cover discretionary trust deed when writing LV= Relevant Life Cover.

Key Person Cover

A trust will be needed in the following situations:

  • If the key person is an employee, the policy is taken out by one (or all) of the business owners. The policy is written in trust, and the business owners named as the beneficiaries.
  • If the key person is a business owner, each partner takes out a policy on their own life, which is written in trust. The remaining business owners are named as the beneficiaries.
Sole traders
  • If the key person is the trader, the policy is written in trust, and the sole trader’s next of kin named as the beneficiaries.
  • If the key person is an employee, no trust is needed
Limited company or liability partnership
  • No trust is needed as the business owns the policy

Take a look at our full list of trust documents

Share and Partnership Protection

To set up cover, each business owner takes out a life insurance policy (that can include critical illness cover) on their own lives, written in trust. The beneficiaries are the other business owners, who should also be the trustees.

Smaller businesses with just two owners can set up policies under a life-of-another arrangement, without the need of a trust. However, writing business protection in this way doesn’t allow for flexibility if the business changes ownership in the future.

A cross option agreement should be set up at the same time as Share or Partnership Protection.

Our Online Trusts tool will guide you through the process of setting up a trust for your client.

Simply, here's how it works:

  1. answer the questions to filter down to the most appropriate trust form we offer to use
  2. fill in the details on the trust form, including settlors, trustees and witnesses
  3. the settlors, trustees and witnesses will get an email, and can then sign the form electronically with a touch screen or mouse
  4. once everything is signed, the settlor will get an email to let you know we received the trust form
  5. we'll check the details, apply it to the policy and send a copy back to the client to keep safe

Try the Online Trusts tool

Trust deed forms

We’ve produced a number of specimen (or ‘draft’) trust deeds you can use when writing LV= Business Protection. If your client’s circumstances are more complex we also accept bespoke arrangements drawn up by a solicitor:

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Business Protection options

Find out more about the type of businesses we cover and the policies available.

More on Business Protection options

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Tools and calculators

See all our business protection calculators available to simplify your client conversations.

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Business Protection support

Our team will make sure that all your Business Protection applications are dealt with quickly and efficiently.

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Why choose LV=

Your clients can access a range of resources and expert advice, as well as a number of value added services.

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Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK