Key Person
Helping to protect the financials of a business in the wake of a key person exiting the business.
What is Key Person
insurance?
Key person insurance is taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business. The insurance payout is a lump sum and is used to offset the costs (such as recruiting a successor) and losses (such as a decreased ability to transact business) which the business is likely to suffer in the event of the loss of a key person.
More Information
The most valuable resource of any business is its staff. Loss of key staff can affect every aspect of a business – revenue, profit, goodwill, loan guarantees, and ultimately the value of your business. This means that most small to medium businesses are carrying significant financial risk should the unexpected happen to one of their key people. A key person can be anyone directly associated with the business whose loss would cause financial strain to the business; this could be a successful salesperson, someone with a unique skillset or contacts through to a guarantor on a company loan.
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