Protect yourself and your business against the loss of your keyperson

Keyperson protection
Arranging adequate business protection ensures the necessary funds end up in the right hands at the right time, helping to preserve the continuity of your business.

 

Businesses ensure they attract the right people for their company by offering a competitive salary, excellent benefits, a pension plan, etc. To ensure a key employee does not leave they may offer additional incentives for them to stay. So, why wouldn’t you insure your business against the loss of an important employee due to serious illness or death? Isn’t this an even greater risk to your business? Keyperson Protection can provide the cover you need to ensure you’re business carries on.

Although businesses may be aware of the potential effects of losing a key employee, many still don’t have any form of keyperson protection, succession plan or shareholder agreement in place. They either have never considered it, or they don’t understand the need.

 

Have you considered the consequences of losing your Key Person? 

A keyperson is an employee/director whose expertise, knowledge and contacts are vital to the continued financial success of the company, and whose absence could have a serious impact on the future of the business. The sudden death of a keyperson could give rise to a number of immediate financial pressures for the company;

  • Calling in of company loans, in particular, any loans carrying a personal guarantee given by the keyperson
  • Costly interruption to the business
  • Loss of business contacts
  • Extra resources may have to be committed to the recruitment and replacement of the key individual

Keyperson Insurance can be taken out anytime and is designed to protect the business against the financial consequences of losing a key employee whose death or serious illness would have a significant impact on the financial or strategic position of the business. The company pays the premiums and receives the benefits, and may use the funds in any way it chooses. If anything happens the keyperson the policy can provide an immediate lump sum payment to offset any financial losses incurred by the company.

 

Keyperson Organisational chart
Benefits of Keyperson Cover
  • Enables you to repay any loans taken out by the key person
  • Allows you to meet ongoing expenses whilst the level of sales recovers
  • Facilitates payment for outside consultants or expert advice
  • Inspires confidence in staff and customers due to positive action being taken and financial obligations being met
  • Helps with recruitment and training costs for replacement staff

 

There may however, be tax implications for the company and/or individual when taking out business protection. In all cases, we recommend that business owners obtain professional legal and tax advice to ensure that any arrangement they put in place is appropriate to their personal and corporate circumstances. Want to know more about our business solutions? Click here to request a call back. 

Scroll to Top