Financial protection for your business
The loss of a key person, or key people in your business, due to death, accidents, or long-term sickness can have a serious effect on your profits, not to mention operations. Did you know there’s an insurance that will financially protect your business from loss of profit, and fund finding a replacement?
What is Key Man Insurance?
In most businesses there is a key person, or a few key people, that the business can’t function without. Even if that person is off sick for a day or two, or on holiday, operations falter.
Often these people are also income generators, so the success of the business depends on them.
In the event that a key person is no longer able to work, even with the best systems and processes in place, your business can struggle.
Key Man Insurance, also called Key Person Insurance, protects your business from having a financial deficit due to unforeseen circumstances such as death or illness of a key person.
It replaces lost income as well as makes funds available for finding and training a new replacement.
Who is Key Man Insurance for?
If your business relies heavily on certain individuals, it is worth considering this insurance so the success of your business can continue.
In the case of doctors and dentists often that key person is you, in which case there are a number of insurance options.
However, many practices have other employees and associates that have specialist skills or knowledge, specific to generating income, new business, or management.
How does Key Man Insurance work?
If you have insured your business with Key Man Insurance and your key person dies or is diagnosed with a critical illness, such as cancer, the insurance policy would pay a lump sum to the business.
This lump sum is designed to cover the loss of the employee in the period until a replacement is sourced and up-to-speed with your business operations. The pay-out can also be used to cover recruitment costs and train a new key person.
CLAIM Tax relief on the insurance premiums
As an added benefit, if you run your business through a company or partnership, the premiums on a Key Man Insurance policy are allowable for tax relief. This isn’t available for sole traders though.
It is important though that the insurance is taken out to cover losses arising in trading income, rather than protecting against a capital loss; i.e. devaluation of the business or shares.
Get a Key Man Insurance Quote to protect your business.
If you would like us to provide a quote to protect your business against loss of profits in the event that a key person is unable to continue work, contact Darren:
Tel: 01403 780 770