What if someone who is key to your business falls seriously ill or dies? Will your business be able to cope? There have been cases where a key person has died and the effect has been devastating, in terms of loss of revenue, loss of sales, and increased workload for remaining staff members.
If this is a possibility within your business, the solution is key person cover, also known as key man insurance.
What is key person insurance?
Key person insurance aims to compensate your business while you recruit and train a new person. A key person policy can cover your company for:
- Financial loss caused by their death or critical illness
- The cost of recruiting and training their replacement
- Loss of business caused by contacts or clients deciding to take their business elsewhere
How does key person insurance work?
Key person insurance is a life assurance policy, or life assurance and critical illness policy, which is taken out to cover the life of a key person within your business. This policy is owned and paid for by the employer, so if it is activated the pay-out goes to the employer in the form of a lump sum.
This pay-out could potentially help towards recruiting and training a replacement, or hiring temporary staff to cover the workload.
Talk to the team here at Hartsfield about key person insurance and critical illness cover.