Find out the purpose of keyman insurance and how it can help protect your business
If your business relies on a few key members of staff for its success, you have to think about what would happen if those key people suddenly became too ill to continue in the business.
Or, in the worst case scenario, what if they died?
Although the personal tragedy would be first to mind, you have a responsibility to consider how this would then impact your business - and your remaining employees.
Having a keyman insurance policy in place can help cover your business financially in the event a key member of staff dies or becomes too ill to carry on in the company.
Here’s the key information to consider for keyman insurance.
What is a keyman policy?
Simply put, a keyman policy is a death in service insurance that pays out to the business in the event a key member of staff dies or becomes critically ill.
Who you define as a ‘key person’ will differ depending on your business but it can be anyone you judge to be essential to the financial success of your business.
In the event someone covered by a keyman policy dies or gets ill, your business will receive a lump sum payout to help reduce the financial implications of losing that member of staff.
Who can be covered by a keyman insurance policy?
The definition of a ‘keyman’ is entirely dependent on your business and the employees you deem to fit into this criteria.
Typically it’s reserved for owners or senior directors who contribute significantly to your business’ finances.
It’s also often used as a cover for top sales people.
But, it can also be used to cover employees with specialist skills or responsibilities in the business who could be difficult to replace.
For example skilled engineers operating in a specific niche.
Deciding who to use keyman cover for
The simplest way to judge who to buy a keyman insurance plan for is to determine which employees generate the most revenue, or contribute most to the success of your business.
For example, do you have any employees whose loss to the business could impact key client relationships?
Would their loss create a financial hole in the business that would be hard to fill?
Would losing that employee be detrimental to your future growth plans?
Do they have any loans or overdrafts that could be impacted by their death or removal from the business on medical grounds?
If you have employees who fit this kind of criteria it could be worth covering them with keyman insurance.
Preparing for the worst with keyman cover
No-one wants to think about the prospect of a key employee’s death in service or the potential of them becoming critically ill.
But it can happen.
When it does it’s important to remember the responsibility you have to your remaining employees.
They’re depending on the survival of the business for their own futures.
They have mortgages to pay and loan repayments to worry about.
Any financial uncertainty or worries about job losses could have a serious effect on them.
Keyman insurance simply helps provide some financial security to your business in the event something does happen to a key member of staff.
Getting the right keyman insurance with Rigby Financial
We can help you get access to the best keyman insurance policy rates so you can keep your business protected from financial upheaval without compromising your immediate financial future.
WIth a keyman insurance policy you can be assured that should the worst happen you’ll be able to continue trading and have one less thing to worry about in what will already be an incredibly difficult time.
Get in touch with us today for more information or to talk with one of our keyman insurance experts.