As a business owner you will have taken measures to protect your business premises against fire and theft, or have indemnity cover in case of complaints and you’ll have most likely put plans in place to ensure the future growth of your company, but have you sat back and thought about what steps have you taken to cover the loss of arguably your most important assets – yourself and your key personnel?
The impact of losing a key person
Most businesses have at least one individual who is key to the success and profitability of the business, a ‘key person’. The death or critical illness of a key person can financially impact your business in many ways, including:
- the costs of recruiting and training a replacement
- a loss of sales and new contracts
- a loss of confidence in the business
- additional pressure on senior personnel covering the key person, possibly causing some staff to leave.
The financial impact following the death or critical illness of key individuals can put your business at risk. These events often occur when least expected and can cause:
- loss of profit
- interruption to cash flow
- disruptions to loan repayments
- changes in shareholder control.
Protecting your business
In some instances the financial burden could be so great that the business is unable to continue. So seriously thinking about Key person insurance, that will provide funds to help your business cover the financial impact of the death or critical illness of your key person, should be just as high on your agenda as any other type of business protection.
Discussing in depth the needs of the business should the unthinkable happen, will give you an understanding of what should be considered when taking out key person insurance. Once you’ve got this covered it will give you peace of mind and, when needed, the funds would be yours to use, as you consider appropriate, for the benefit of your business.
Take a look at how we can help you with business protection