As you’ll know, in any business, insurance is a basic safeguard of livelihood and future stability. Business protection is all about insuring for the unexpected; protecting your business if something goes wrong. Making sure you have cover for buildings and contents, public liability, for key equipment, stock and vehicles, to name but a handful of examples, is seen as an essential part of running a business.
However, there is one vital aspect of a business which is often overlooked that many businesses do not usually consider insuring.
What is the one thing your business couldn’t do without?
The reality is that without the right financial protection – Key Person Insurance – your business could suffer a significant loss if key people became seriously ill, or died. This of course, could include you.
The cost of replacing skills and expertise, as well as potentially having to pay out a share of the business profits to a third party, are all very real threats that face your business, without the right kind of protection in place.
Ask yourself these questions:
For Key Person protection
Could the business continue if you or a key employee died or suffered a critical illness and was off work?
Would you be able to replace these skills?
For Share Protection
What would happen if a director or partner dies or suffers a critical illness?
Have you thought about what would happen to their share of the business?
Do you have a partnership agreement in place to allow you and the other partners to buy the shares?
For business Loans
Do you use business loans to support your trading activity? How long could you cover these payments if you, a key person or a partner died or suffered a critical illness?
What is Key Person Insurance?
Thankfully, there are a number of business protection solutions available, all designed to offer you the best possible cover and peace of mind that your business could continue to run, should the worst happen.
In general, Key Person Insurance is an insurance policy taken out by a business to compensate that business for any financial losses that may arise from the death or extended leave of a key person within the firm. Directors and employees with highly specialist skills or knowledge are key employees of the company they work for. Taking out Key Person Insurance to protect the company is a wise move many firms are taking.
Key person Insurance can provide several benefits. These can include:
- Paying the costs of a temporary replacement
- Meeting the costs of recruiting a permanent replacement
- Covering the costs of death or incapacity of a key member of staff
The full scope of cover will depend on the type of policy purchased and it is crucial you take advice on this matter. For more information please visit our Business Protection page.
You can also contact me for any further information, in which I will be happy to help.