As a business you would have, as standard, insurance to cover your buildings, stock and vehicles, you may have public liability insurance and even professional indemnity insurance. But have you insured one of your businesses most valuable assets – your Key Staff? Keyman insurance is not only one of the most overlooked insurances for businesses, it is also one of the most important.
Your Key Staff
Key staff represent the heart of every business especially in a small, often family, business that has up to 4 employees. Prolonged absence of a key member through serious illness or even death can be terminal for some of these enterprises. The risks are the same for limited companies, a partnerships and sole traders.
In this context Keyman Insurance is a must. Keyman Insurance represents a group of insurance plans all designed to financially protect business from the affects of prolonged illness or even death of staff who are central to the prosperity of the business. Keyman insurance cannot replace people but it can provide cash which will buy time and cover the costs of temporary staff, recruitment, loss of profits etc.
The insurance falls into a number of categories – insurance to help your business recover during the extended period when your key personnel are unable to work – insurance to cover cost to train or recruit a replacement, insurance to protect profits, insurance to protect shareholders or partnership interests, and insurance for anyone involved in guaranteeing businesses loans or banking facilities.
Who Are Your Key People
Keyman Insurance to Protect Your Profits
The effect of losing key staff goes beyond simply the cost of their salaries and the cost of replacement. As they’re central to the businesses prosperity, their loss will have a financial effect on your bottom line. You need to insure against loss of profits too!
Keyman Insurance to Protect Shareholders or Partners
Here we consider insurance to protect interests in the event of a 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 plans can be implemented which provide the necessary finance to buy the shares from these original shareholders or their estate.
Keyman Insurance Insuring Those Who Provide Personal Guarantees
When a business takes out a loan or raises bank 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 be in a position to call in the loan. What happens then? Again, Keyman Insurance is the answer. Insurance plans can be structured to pay off the loan and thus free the business and the guarantor’s family, from any major financial worry.
We can arrange the necessary paperwork and steps to implement the cover you need and ensure any tax liabilities are met.
So, can your business afford to ignore Keyman Insurance?