Castiel Winser Financial Advisers, A Relationship you can trust!
The most important assets in a business are the people who run it

Key Person Protection

What is Key Person Protection?

Key Person Protection is much the same as a mortgage protection policy or a normal term assurance taken out to cover a loan on a mortgage. The main difference is the beneficiary, which in the case of Key Person Insurance is the company, rather than the wife or husband. The policy is taken out to protect your business against the financial repercussions of losing a valuable employee due to critical illness, ill health or death. The benefit is to help the company cope financially without that person's services. Many large businesses will already have these protection policies. However, small to medium sized companies tend to overlook this insurance or do not even know that it exists. Businesses don't think twice about insuring their important equipment, but for some reason do not think to insure the most important part of their company, 'the directors/sales team/employees' until it's too late.

The benefit will be designed to cover the firm's expenses in meeting any emergency costs, recruiting a replacement employee and protecting the future of the business.

Types of Insurance you may need to think about.

  • A key person life insurance policy which can include critical illness cover will provide a lump sum on the death or critical illness of the insured person.
  • A policy to protect profits that may see a serious fall without the services of that person.
  • An insurance policy to provide monies on the death or critical illnessof the insured person, to the remaining directors, shareholders or partners in order for them to buy out the shares from the original owner.
  • Key person insurance for anyone involved in guaranteeing business loans.

Who Are Key People?

  • The people who drive the business.
  • The people without whom your business would lose sales and profits.
  • Directors, partners, shareholders.
  • Integral managers, sales people, key IT development specialists, etc.

Insurance to Protect Your Profits

The damaging effect of losing an important employee could go well beyond just the cost of a replacement. They could be the sole reason your company is doing so well.

Protect Shareholders' Partners or Fellow Directors

Similarly, if a key shareholder was to pass away, the firm's remaining shareholders or directors may want to purchase the deceased's shares from their estate promptly to maintain control of their business. Insurance policies can be set up to provide the necessary finance to buy the shares from the original shareholder or their family.

Protect against those who maybe liable for Personal Guarantees

Business loans will often require a guarantee by a director or shareholder to put a charge on their personal property. Key Person Insurance cover can provide a structured means of paying off this loan, freeing the business and, possibly the family, from this financial burden.

Please contact us if you wish to discuss your Business Protection provisions.