As a businessman you might have public liability insurance
and you insure your buildings, stock and vehicles. You may
even have professional indemnity insurance and legal cost
insurance. Is that all? What about your other primary assets
– your key staff?
Key staff represent the heart of every businesses but no more
so than the UK's 3.9 million small, often family, businesses
that have up to 4 employees. Prolonged absence 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. The insurance can't replace people but it can provide
cash to buy time and cover the costs of temporary staff, recruitment,
loss of profits or provide a cash injection.
The insurance falls into four categories – insurance
to help your business recover during the extended period when
your key personnel are unable to work or 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.
Keyman Insurance on those who are central to your business.
Who are your key people? They are the ones who steer, create
and drive your business. The people without whom your business
would lose sales and profits or without whom even the basic
viability of your business would be shaken. Look at the Directors,
Partners, owners and beyond. Consider the roles of senior
managers in sales, technical development and operations –
the roles will change in every business but the candidates
are sure to jump out at you.
Insuring these people will provide the extra cash needed to
take on temporary staff or recruit and train a replacement.
Keyman Insurance to protect your Profits.
The effect of losing key staff goes well beyond simply the
cost of their salaries and the cost of replacement. As they're
central to the businesses prosperity, their loss will knock
on to the bottom line. You can insure for loss of profits
too!
Keyman Insurance to protect Shareholders or Partners.
Here we are talking about insurance to protect interests in
the event of 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 schemes can be implemented which provide
the necessary finance to buy the shares from the 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 well be in a
position to call in the loan. What happens then? Again, Keyman
Insurance is the answer. Insurance can be structured to pay-off
the loan and thus free the business and the guarantor's family,
from major worry.
Most of the UK's leading insurance companies offer Keyman
Insurance as a development of their Life and Critical Illness
Insurance interests. They have all the necessary paperwork
available to implement the cover you need and ensure the taxman
is kept at bay.
So, can your business afford to ignore Keyman Insurance? You'll
be either a brave or foolish man to say NO!
