5 Ways Keyman Cover Can Protect Your Business

Keyman Cover is a business specific insurance policy. It’s taken out by the business to protect it from the financial turmoil loosing a key staff member to an unexpected critical illness or death can bring. Below I have highlighted 5 of the ways one of these business protection policies can help.

Secure Business Income

 The biggest reason for taking out Keyman Cover is because it will provide your business with the sum assured (a lump sum payment) should the insured staff member (a main income generator or a vital decision maker) become critically ill or die. The benefits this can provide can be far reaching, but ultimately narrow down to the policy providing the business with the funding it needs to continue. The lump sum can be used to replace the lost income generated from the deceased or ill staff member. This money can be used to help replace lost profit or finding and hiring a replacement.

Business Growth Plans

Loosing a key member of staff in the middle of extensive growth or expansion can be hugely detrimental. Business growth can be unsettling with a variety of factors changing at varying paces. If a key decision maker or someone heading up this growth was suddenly critically ill or died, the process could be delayed or stopped entirely. Having the funds available for recruitment and to cover overheads can allow the business to continue its growth plans as expected.

Business Growth

Recruitment Costs

Training and recruitment of staff are a huge business overhead. As the value and experience of staff increase so to do these costs. If you were to lose a very vital and valuable staff member with no warning, that is likely to bring with it huge recruitment and training costs, along with an inevitable drop in profits. These coinciding at the same time can put the business under serious financial strain. Over a prolonged period of time this can ultimately lead to the businesses demise. Keyman cover provides funds when the business is most vulnerable. The lump sum it provides can be used for anything the business needs.

Secure Business Loans

Keyman cover is seen as an asset when you are trying to get company finance. The policy will provide you with the finances to make sure that the loan payments continue to be met should you loose a main company profit maker to a critical illness or death. In a period of turmoil such as this, having the companies credit lines remain open can be essential to its continued success.

Protect Against Competitors

If the company is shareholding and one of the businesses greatest assets was to become critically ill or die, Keyman cover can be instrumental in helping to stabilising the companies value. Having an influx of money can help to limit how far the share price may fall. If the share price were to fall too low, it can leave the company open to competitors. Key Man Insurance can help replace staff seamlessly and keep the companies’ quarterly figures high.

Keyman Cover can also protect a partnership from being brought out by a competitor. The same can happen should a director within a partnership die unexpectedly. If the remaining partner is unable to buy the share of the business which has passed to the deceased’s family, the family may look for another buyer. This opens up the business to being bought by a competitor or outside party.

If you would like to find out some more information about Keyman Cover or are interested in getting quotes for your business, please fill in our contact form below.