Key Man Insurance
It is an old axiom in business that no one is indispensable. But do you have an individual (or individuals) in your company without whom the organisation would suffer irreparably? What would happen to your business if you were to suddenly lose one or more of your key people? And did you know that you can insure your company against the damaging effects of exactly such a loss?
Key Man Insurance is a policy taken out to protect against the lost of earnings that may result from the death or incapacity of the individual(s) specified, as well as the cost of recruiting a successor. Identifying a suitable candidate for a “Key Man” position is usually a lengthy, arduous and expensive process, and you may find that months go by and multiple candidates are considered before the right one is found.
In the case of small businesses or partnerships, should one partner die, a family member may not want to take his or her place, but the business will likely continue. Key Man Insurance gives the surviving partner(s) the necessary capital to buy their late partner's shares from the family, and also recruit a replacement, if necessary