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Why is Key Man Insurance important for businesses?

Take a key cog out of a gearbox and it grinds to a halt. Look at your business and consider the hit it might take if you could no longer rely on certain staff.

If they were unable to work for any length of time, or unable to return, what would be the impact on your productivity and profitability? How long might it take to find a suitable permanent or temporary replacement?

We know that key person insurance cannot conjure up a replacement, but it can provide invaluable financial compensation for your losses; a lump sum payment to help replace lost profit and costs associated with replacing a vital staff member.

 

How does Key Man Insurance work?

Key Man insurance cover typically falls under these categories:

  • Profit protection – covers lost profits if, say, a key salesperson is unable to work.
  • Shareholder/Partner protection – covers shareholder and/or partner interests.
  • Personal Loan guarantees – cover for those guaranteeing business loans or other banking facilities.

Determining the right key person insurance for you and your business means examining the multitude of policies available and the options that may come with them. With so much choice it can be hard to see the best option.

 

Choosing the right key person protection for you and your business

Arriving at the right choice for you and your business requires careful attention, knowledge and expertise.

In finding and recommending the best policy for you, our expert business insurance specialists will work closely with both you and the UK’s leading Key Man insurance providers, including Bright Grey, Friends Life, Legal & General, Unum and Zurich.

You’ll need to take a long, onjective look at your business, identifying those that fulfil business critical roles and whose unexpected absence could seriously impact your business or adversely affect shareholder relations.

 

What to think about when choosing key man insurance:

  • Who is key?
    Striking a balance between those you cover, the level of cover and what your business can afford.
  • How much protection might you need?
    Look at your key people and think how long it might take and how much it might cost to replace them (including productivity loss as their replacement gets up to speed), how and for how long their absence might hit your profit and, conversely, any savings that their absence might generate.
  • Are any of the key people you’re looking to protect shareholders?
    This can impact your tax planning depending upon the size of shareholding.
  • How will you calculate the financial value to your business of a key person, taking into account their business role?
    This can inform the method of calculating cover. For example a multiple of salary may be best for an employee but not for a director whose salary may be supplemented by dividends.

Chase Templeton can help you find the right key man insurance policy

It doesn’t matter whether you’re a sole trader, small business or major international corporate – protecting against the loss of your key people makes real business sense.

Your dedicated Chase Templeton adviser will be pleased to help you identify priorities, guide you to the best available key person insurance solution, and provide ongoing support – be that amending your future protection to meet the changing circumstances of your business or helping should you need to claim on your policy.

How We Work

1

At Chase Templeton we discuss your situation, needs and requirements

2

We compare your details against everything the market has to offer

3

We present our recommendations from the UK’s leading insurers