Keyman Insurance, also known as Key Person Protection Insurance, is a means of insuring the most important personnel within your business, in order to ensure continued trading, success and profitability of your business, in the event of their loss due to death or critical illness.
What is Key Person Insurance?
All businesses, of any size, likely have a person key to the running of that business and loss of that person would negatively affect the future of the business. From yourself, the owner and senior management to technical experts, someone within your business is likely essential to the profitability and productivity of your business.
If that key person were to die or be diagnosed with a critical illness, it is highly likely that your business would be severely affected. The sudden loss of skills, knowledge, leadership and experience previously contributed by that person can result in a loss of productivity and profits for the business, and the costs incurred whilst having to recruit and train a replacement or have a temporary replacement, could be significant.
Other unexpected effects could include the loss of crucial business contacts connected to that person, the cancelling of contracts maintained by them, the loss of customer’s and supplier’s confidence in the business. These effects could have a detrimental impact on the business.
Keyman insurance ensures your business will have financial protection in the event of the death or critical illness of the key person, with the business receiving a lump sum payment, which could be used to pay off any outstanding loans, recruit and train new members of staff, or lessen the financial impact of any drop in trade or the loss of any contracts. Keyman insurance can also give confidence to shareholders and investors, by knowing that the business has this important protection in place.
Advice on acquiring Keyman Insurance for your Business
If your business has one or more employees who are vital to its continued success, then key person protection insurance should be considered as a means of protecting your business against the sudden loss of that person.
Although the insurance policy is taken out for an employee, it is taken out by the business itself, therefore the premiums are paid for by the company.
Spectrum FA have much experience in arranging Key Person Protection, having already advised many different types of businesses. Regardless of the size of your business or the industry you are in, our specialist business protection advisors will be able to provide you with the correct advice and level of cover for your needs.
If you would like to learn more about Keyman insurance or how Spectrum FA could help you protect your business, then please get in touch with us today to arrange your free, no obligation review. You can contact us by email at firstname.lastname@example.org, by phone on 01279 315 013 or by using the contact form.