Key Man Insurance
Key man insurance is the businesses contingency plan. The policy is in place to protect the business against the loss of income generated by key staff members. The business takes out a life insurance policy on one or more staff members who generate large profits for the company. Then should these key persons fall prey to critical illness or die the business will be paid out a lump sum to cover any loss in income or to cover any expenses which occur.
Why You Need Key Man Insurance
Key man insurance provides emergency funding when the company needs it most. If your businesses income is generated by your staff this protection is vital. The lump sum provided should your key man become incapacitated can pay for any profit loss caused, any compensation which has to be paid out or funding to cover the replacement and training of staff.
Who Is It For
The policy is simply a life insurance policy on a staff member, however it’s taken out by the business for the business therefore all premiums must be paid by the business. The lump sum payment should something happen to the insured party goes straight to the business. It is there to provide support for the business for any losses or costs it occurs after losing an irreplaceable staff member.
Who Is a Key Man?
A key man can be anyone within your company or business which generates a substantial income or has a wealth of knowledge vital to the running of the business. This can be one of the company directors or an employee with a valuable skillset such as a sales manager. It’s a staff member who is indispensable and someone who would be difficult to replace.
Benefits of Key Man Insurance
Key man insurance covers the business when it is most vulnerable. 39% of business owners expect to be out of business within 18 months of the death or critical illness of their top staff. Key man insurance can make sure this doesn’t happen. Having this in place can also reassure customers that your business is secure.
What the Pay Out Could Cover
The pay out given to the company on the loss of a key man can be used for anything the business sees fit. It can cover compensation costs, cover the loss of income or can be used to cover the fees and training of a new staff member - which can be very high.
Without Key Man Insurance
The loss of a key man from your business can result in reduced sales, loss of profit and reduced turnover it can also result in wasted time, recruitment costs, disruption of development and plans, loss of strategy, and increased workloads for remaining staff. Without a back-up plan in place your business may not be able to recover, which is why key man insurance is so important.
Where To Buy
Key man insurance is a relatively new insurance and is a form of business protection. This and many other forms of business protection can be found with Quotesupermarket.com. We have a range of specialised business protection advisers who can save you time and money. They will compare a range of the best UK providers to find you the best key man insurance available for you. Their advice and guidance is completely free and they can find you a range of quotes with no obligation to buy.
If you are interested in getting key man insurance speak to one of our advisers today. Simply fill in our online form and they will be able to find the best policy for your needs.