Key person insurance can help to keep your business trading if you lose an important member of your team due to illness or premature death.
It does this by providing a lump sum cash injection into your business if this happens.
Reasons to cover your key people
Your business has money to replace a fall in profit or loss of revenue
Would this reduce the personal worry of how you will find the money to keep the business trading?
Protects your personal earnings
A lump sum could make sure your own personal earnings aren’t affected. This relieves personal financial worries outside of the business.
Stops the need to borrow money to keep the business afloat
This may not be an option depending on your accounts or economic conditions. Losing a key person could affect the reputation of your company and so borrowing money may be difficult.
Supplier, staff and customer confidence
The reputation of your business is crucial. Proving financial stability could ensure those who work with you have continued confidence in you. No business wants to lose staff and customers, especially at a turbulent time.
Who are your key people?
Owner/MD – Do they drive the business forward with their ideas and enthusiasm?
Sales People – Would you lose clients if they’re gone? How quickly can you replace them to save their relationships?
Inventors – Responsible for new product lines, would their new ideas and vision be hard to replace?
Technical Experts – Would it take time and resources to retrain and replace a lost technician?