Is your business protected against the loss of key staff or personnel?
The loss of a director or a key member of staff can have a devastating affect on any business, particularly in the SME sector. While businesses can insure themselves against all types of scenarios they sometimes overlook what makes their business a success – their key staff or directors.
What is Key Man Cover?
Key Man Insurance is specifically designed life-insurance solution to financially compensate a company for the loss of a director, shareholder or a key member of staff due to sudden death or serious illness.
How does Key Man Insurance Work?
A company can start a Key Man Insurance plan at any stage during their business lifetime. In affect the company is insuring itself against the loss of a key member of staff due to sudden death or serious illness. In this event the Key Man policy will pay out a lump sum to the company to cover the financial loss suffered by the company. The policy may also be used to pay off bank loans guaranteed by a director or to pay off a loan made to the company by a director.
Key Man cover is vital for a business of any size. Statistics show that 90% of businesses fail due to the loss of a director or key employee. The loss of key personnel can leave a company in a poor financial situation without any warning.
In particular it can give rise to:
• The calling in of company loans.
• Interruption to the business.
• Loss of key business contacts.
• Financial out lay to replace a key employee.
Any business that has Key Man Insurance in place has the added security that their business is protected should an unexpected event happen. As a business owner it gives you the peace of mind that your business is safe no matter what the future holds.