Keyman Insurance – Don’t Let Your Company Fail Without You
What exactly is Keyman Insurance? Keyman insurance (also sometimes known as Key Person Insurance) is a type of insurance which can protect your business from the loss of a key employee, salesperson, ceo, or other important member of your company. If the success of your business relies heavily on the work of one individual, keyman insurance is definitely something you should consider.
The aim of a keyman insurance policy is to ensure that a company can continue to operate and succeed financially in the event of the unexpected loss of the key person. Such a policy is not intended to insure beyond a period of time where the key person’s usefulness to the business is complete (retirement perhaps).
This kind of insurance policy can be taken out on the life or health of the vital employee, and is useful in protecting the company from the costs associated with hiring, training, or finding someone to replace the key employee. It can also insure against the decreased ability of the company to conduct normal business in the absence of the key person.
Keyman insurance can also help to protect partners or shareholders. If you are involved in a partnership, please do consider keyperson insurance to protect yourself. Also, if it is your job to provide loans or other financial assistance to a business in which the loss of a key man would severely hamper business, it may be in your best interest to take out a keyman insurance policy.
As with all insurance policies, be sure to read the fine print before you sign on the dotted line. Insurance documents contain all sorts of clauses and conditions which will determine if a keyman insurance policy is valid under particular circumstances. For instance, if the key person decides to retire, the business will generally not be covered under the key person policy.
