Keyman Insurance – Insures Some of your Biggest Businesses Risks
Keyman insurance is one of the most overlooked and most important insurances in business. You might have public liability insurance and you insure your buildings, stock and vehicles, professional indemnity insurance and legal cost insurance.
What about your other Primary Assets – Your key staff?
Whilst these are all very sensible precautions, we can sometimes neglect to protect our most valuable business assets: the men and women whose talent, experience and judgement contribute substantially to the financial health
of the organization. These key staff represent the heart of every businesses especially small or family run businesses. Prolonged absence through serious illness or even death can result in big losses or even closure.
Keyman Insurance is a must. It can’t replace people but it can provide cash to buy time and cover the costs of temporary staff, recruitment or loss of profits.
Who Are Your Key People ?
A keyperson is anyone who the company depends on for its continued success, relies on their specialised skills, reputation and contacts and whose death would have serious consequences for your company.
This insurance falls into the following four categories :
Insurance to help your business continue during the period when your key personnel are unable to work, or to train or recruit a replacement.
Insurance to protect profits
Insurance to protect shareholders or partnership interests
Insurance for anyone guaranteeing a business loan
Keyman Insurance to Protect Your Business
Many businesses will not have employees with the same knowledge, experience, judgement and reputation as the deceased employee. Sourcing an external candidate and in particular, the recruitment and training process can be slow and expensive.
Keyman Insurance to Protect Your Profits
The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they’re central to your businesses, their loss will knock on to the bottom line. You can insure for loss of profits too!
Keyman Insurance to Protect Shareholders or Partners
Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not want those stakes held by newcomers. Keyman insurance schemes can be implemented which provide the necessary finance to buy the shares from the original shareholders or their estate.
Keyman Insurance Insuring Those Who Provide Personal Guarantees
When a business takes out a loan or raises finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Insurance can be put in place to pay-off the loan and free the business and the guarantor’s family