Have you ever thought about what would happen if you were no longer able to run your business? Could you still afford to pay someone else as replacement as well as receive your share of pay? Could you make up for the loss the business is facing at the same time? For peace of mind, key man insurance could be the solution.
A key man in the business would be a vital staff member, without whom the business would incur losses. They could be the business owner, partner, someone with a substantial amount of knowledge for the success of the business or someone who brings in a lot of income like your top salesperson. For small businesses, if a key person dies or suffers a critical illness it is likely that the business could suffer. When this is the case, some may resort to closing down the business as a result of not finding a solution, however with key man insurance, businesses would be protected if such unfortunate circumstances were to arise.
The cover would usually be taken out by the employer, therefore upon the death or critical illness of the employee, the amount would be paid out to the employer for the business.
Recent research has shown that 39% of business owners expected to be out of business within 18 months after the death or critical illness of their top staff. Currently the UK has 3.9 million small businesses with less than four employees. With such a small number of staff, death or critical illness of one can seem a major issue. Especially if that staff is one who is generating the income of the business.
The lump sum paid out upon the death of the vital staff member would be made to keep the business financially stable so it does not face losses. It also can help with the costs of hiring a replacement or having to train a new member of staff as a replacement, as well as paying off loans. It is cheaper than you might think too; Key Man Insurance quotes are available here.
Indeed, for any business, expansion, growth and profit are the key aims. Employers select people who they think will bring out the best in the business. Key man insurance allows employer to take control of the situation, manage risk, keep the business stable and have peace of mind to carry on doing what they do whatever the circumstance.