In order to protect your liabilities, revenue and staff costs there are various types of insurances you may wish to consider depending on the type of business you operate;
If you’re a businessman, you most likely have thought about insuring your buildings, vehicles, and stock. You may even have legal cost insurance as well as professional indemnity insurance. If you’re concerned about the losses your business might incur, you might want to consider getting keyman insurance as well. Keyman insurance is a kind of corporate-owned life insurance which will insure you (the employer) against the incapacitation or death of a key employee. Every business won’t run smoothly without the help and efforts of the key staff. The prolonged absence or death of a key employee can be detrimental to any business, which is why keyman insurance works great for business owners.
Keyman insurance will help protect you from unfortunate circumstances that may befall your business if one or more of your key staff can’t work for you anymore. As an employer, you may get a keyman insurance policy on the health or life of your employees whose work, knowledge, or contribution is considered to be uniquely beneficial to the company. The main reason for getting keyman insurance is to offset the losses and costs which you will bear if you lose a key person. In the case of loss of a valuable employee, keyman insurance will compensate you with a fixed monetary sum, which is stated in your insurance policy.
What Does Keyman Insurance Cover?
Below are four categories of loss in which a keyman insurance policy can provide you with compensation:
- When you lose a key staff for an extended period of time, keyman insurance can provide you with monetary compensation for the hiring of temporary personnel or, if necessary, for the recruitment and training of replacements.
- Keyman insurance can protect your profits. This means that you will be compensated when you lose income due to the absence of a key person. (e.g.: When a business project involving the key person is canceled, or when the loss of the key person amounts to lost sales and income.)
- Keyman insurance also covers instances wherein you lose a person involved in guaranteeing banking facilities or business loans.
- Partnership interests or shareholders may also be protected by keyman insurance. Usually, this insurance will allow other existing partners or shareholders to purchase the shareholdings.
Why Would I Need Keyman Insurance?
Keyman insurance is important in almost any business because getting one will help with the costs of losing a valuable staff. Recruiting and training a different individual to do the same things that the key person used to do may take a lot of time and have you shelling out more money. Getting keyman insurance will help you with these so you won’t have to suffer as much during a prolonged absence or death of a key employee.