What is Key Man Insurance?

Key man life Insurance cover is a policy taken out to protect your business against the financial loss of a key worker, or against the financial repercussions of loosing an valuable employee. Many large business's will already have these protection policies in place, but small to medium size companies tend to overlook this Insurance or do not even know it exists. Business’s don’t think twice to insure their important equipment, or their company cars, but for some reason do not think to insure the most important part of their company, “the key workers” Until of course they lose a key worker through a critical illness or death at which time it is too late.

Over 90% of UK companies employ less than 10 people and these are exactly the companies that are most at risk by the loss of a key person, due to long term illness or death. Prolonged illness or death could spell the end for some of these businesses’s whether a limited company, a partnership or a sole trader. 1 in 3 people will contract some type of cancer before retirement age. Does this ring any alarm bells?

Types Insurance you may need to think about.

• Provide an income to the company whilst the key person is away from work or to train or recruit a replacement.
• Insurance to protect profits that may see a serious fall without that person.
• To provide monies to the remaining directors, shareholders or partners in order for them to buy out the share’s from the original owner. (Shares could otherwise fall into the wrong hands such a wife or husband who knows nothing about your business)
• Insurance for anyone involved in guaranteeing business loans or other banking facilities.

Who Are The Key People?

• The people who drive the business, create and steer it in the right direction
• The people without whom your business would loose sales and profits.
• Directors, Partners, Shareholders
• Integral managers, or Key IT development specialists or development operators.

I'm sure you may well have others in mind, is it yourself?

Insurance to Protect Your Profits

The damaging effect of loosing your key person could go well beyond just the cost of a replacement. They could be the sole reason your company is doing so well. So insurance to cover loss of profits is an important consideration.

Protect Shareholders Partners Or Directors

Families of the deceased or long term ill may want to sell their stake in the business to someone unfit to hold such a high position within the company. Or a member of the family may want to take up a place on the board and make decisions within your company. Insurance policies can be set up to provide the necessary finance to buy the shares from the original shareholder or their family.

Protect against those who maybe liable for Personal Guarantees

Business’s will often have loans or will have raised finance, which will often require a guarantee or charge on their personal property. Lenders may well and often do call in the loan at this time. An insurance product can be structured to pay off this loan and free the business and possibly the family from this financial burden.
Can Your company afford to take the risk?

Call Us Now on 01702 219560

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