Keyman Insurance A Business Essential

Keyman Insurance A Business Essential

Keyman Insurance – a​ Business Essential
If you​ own your own business,​ you'll have insurance in​ place for your buildings,​ stock and vehicles,​ and you​ will be likely to​ have public liability insurance .​
You may also be insured for professional indemnity and legal costs – but have you​ considered insuring your most important assets – your key staff?
In the​ UK there are 3.9 million small,​ often family,​ businesses with up to​ four employees – if​ one of​ those key staff were to​ die or​ fall seriously ill,​ it​ could mean the​ end of​ the​ business,​ and this goes for limited companies,​ partnerships and sole traders .​
If you​ are one of​ those people then you​ should seriously consider Keyman Insurance,​ and here's why .​
Keyman Insurance financially protects businesses from the​ effects of​ serious illness or​ death of​ staff who are central to​ the​ success of​ the​ company .​
It does this by providing cash when you​ need it​ most,​ so you​ can cover loss of​ profits,​ inject more cash into the​ business,​ or​ take on​ temporary staff .​
There are actually four different types of​ Keyman Insurance:
• to​ help your business recover during the​ time that your key person is​ away from work,​ or​ to​ train/take on​ somebody new;
• insurance against loss of​ profits;
• to​ provide protection for shareholders or​ partnership interests; and
• for people providing businesses loans or​ banking facilities .​
1 Protecting your business if​ a​ key person is​ away from work
Your key people are the​ ones who are an​ essential driving force in​ your business - the​ people who if​ they were away from work for a​ long period,​ your business would suffer greatly .​
This could mean a​ reduction of​ sales and profits,​ or​ it​ could mean your business is​ shaken to​ the​ core .​
Look at​ the​ Directors,​ Partners,​ owners,​ think about your senior managers – every business is​ different but the​ key people will soon become apparent to​ you​ .​
Insuring these people will ensure that if​ they are ill or​ die,​ you​ will have the​ cash you​ need to​ take on​ someone new,​ or​ train a​ replacement .​
2 Keyman Insurance to​ insure against loss of​ profits
Losing key staff can have huge ramifications,​ if​ they are central to​ the​ success of​ the​ business then their loss could leave you​ facing bankruptcy .​
It's a​ good idea to​ insure against this possibility .​
3 Keyman Insurance for Shareholders or​ Partners
In this case,​ the​ insurance will protect the​ company if​ shareholders or​ partners become seriously ill or​ die .​
Families may want to​ sell their share in​ the​ company which leaves the​ remaining members open to​ newcomers entering the​ business .​
Keyman insurance schemes can be used to​ provide capital to​ purchase the​ shares from the​ original shareholders or​ their estate .​
4 Keyman Insurance insuring Guarantors
Many small and new businesses are required to​ provide a​ personal guarantee or​ a​ charge on​ their personal property when they take out a​ loan .​
This especially applies to​ small and new businesses .​
If one of​ these guarantors becomes critically ill or​ dies,​ then the​ lenders may decide to​ recall the​ loan .​
Keyman Insurance can protect you​ by paying off the​ loan and taking all the​ pressure off the​ guarantor/guarantor's estate .​
Most of​ the​ UK's top insurance companies offer Keyman Insurance as​ a​ natural progression from their Life and Critical Illness Insurance provisions .​
They can advise you​ further on​ what type of​ policy would be best for you​ .​
So,​ the​ question is,​ can your business really afford NOT to​ have Keyman Insurance?

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