BUSINESS NEWS - South Africans understand risk. We insure our cars, our homes and our businesses. Yet business owners often overlook the financial shock that comes when a founder or key employee is suddenly gone or unavailable. 

Without that person, decisions stall, accounts can be frozen and creditors grow uneasy while the bills keep coming in.

“Business owners will insure property, vehicles, even machinery, says Sonja Steyn, Strategic Head: Wealth Management, Financial Planning & Advice at Momentum Advice. “But they forget their greatest asset is human capital. If leadership falls away, the ripple effects can destabilise not just the business, but families and communities that depend on it.”

Walter Combrink, Momentum’s Life Risk & Fiduciary Manager, sees the same blind spot in his daily work. “The most dangerous thing an owner can say is: ‘My family will sort it out.’ That is a myth, he explains. “If your spouse or child isn’t already working next to you in the business, they cannot simply step in. Banks freeze accounts, creditors panic and within days you can lose the ability to trade.”

Protecting leadership is the key to protecting business

This is where risk planning becomes strategy. Key person cover, buy-and-sell agreements and succession planning can prevent a crisis from spiralling into collapse. Steyn notes that these structures also help businesses grow. “Securing leadership risk makes a business more attractive to lenders and top talent. It signals resilience and long-term thinking,” she says. 

Combrink spells out the benefit in practical terms: “Key person insurance will give you oxygen for at least six to 18 months. That’s breathing space to regroup, recruit or restructure. Without it, even a six-week illness can break operations.”

Succession planning is just as vital. A will may set out intentions, but without funding in place, partners and heirs face difficult choices. “If you don’t sign the agreement or don’t have cover to back it, heirs may sit with a business they cannot run, or partners may be forced into distressed sales,” Combrink warns.

Financial advisers have seen how the right cover can save a business in a crisis, while also sparking growth. Combrink recalls an engineering firm that relied heavily on one specialist. When that person fell critically ill, the business faced a crisis but because it had the right cover in place, it could make a plan immediately. 

Instead of scrambling to stay afloat, the owners used the payout to hire and train a team to take over the specialist’s work.

“It gave them the chance to restructure properly, not just patch holes. Within a few years their revenue had more than doubled, because a group of people could deliver more consistently than one person ever could,” he says.

For Steyn, this is exactly how risk cover should be seen: not as a grudge purchase, but as a way to unlock stability and long-term value. “It’s not just about survival, she says. “Protecting owners and teams builds confidence. That’s what reassures investors and helps you hold on to top talent.”

The right cover can turn crisis into growth

The greatest risk comes when planning is left to drift. Businesses change, taking on new partners, expanding into new markets or rising in value and risk planning needs to change with them. If not, payouts can fall short and successors may be left unable to keep operations steady. 

The gap between what a business is worth and what its cover provides can mean the difference between continuity and collapse. That is why advice and regular review matter as much as the products themselves.

“The future of cover is not the cover, it’s the relationship with your financial adviser, Combrink stresses. “They guide you, coach you, and walk the path with you to your financial goals.”

The lesson is clear: business risk protection is more than a line item on a budget. It is a way to secure continuity, protect livelihoods and build the confidence that fuels long-term growth. Or, as Steyn puts it: “It’s not just survival planning; it’s strategic investment in the future value of your business.”

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