What is Key Man Insurance?

Key Man Life Insurance is a life assurance policy taken out to protect your business against the financial impact of losing a valuable employee due to death, critical illness or ill health. You should check to see if you have this cover in place because, if you don’t, the financial implications can be significant if something goes wrong.

What does Key Person insurance do?

• It will provide an income to the company whilst the key person is away.
• It will help protect profits that may see a serious fall without that person.
• It will provide funds to the remaining directors, shareholders or partners for them to buy out the shares from the original owner.

Who Are your Key People?

These are people who drive your business.

• The people without whom your business would lose sales and profits.
• Directors, Partners, Shareholders.
• People with a specialist skill/knowledge/contacts.

Insuring key employees is straightforward way for businesses to ease the financial impact of the death of a key person.  The funds of a key man policy can be used to finance recruiting and training employee replacements, handling debt and liquidation of the company, or even selling the company. When key man insurance has not been put in place, a key persons death or disability can have a very significant impact on the ability of the business to function; with key man cover the business can at least be shielded from the financial impact until the business owners are able to assess what they wish to do, for example replace the person, sell the business or any other option that they can consider.

Protecting your business from those events we all believe will never happen but actually do is an important decision to take. If you would like more information or to discuss key person cover please contact us.