This article explains why Key Man/person insurance is important for small and medium-sized companies. It also explains what this type cover covers. This article will explain what Key Man/person insurance is and how it can help your company.
Key Person or Key Man Insurance – Do you need it?
If a key employee is seriously ill or dies, small and medium business owners will have many challenges to overcome.
Is your company able to survive?
You can protect your business against such an event by purchasing Key Man or Key Person insurance. This article will help you understand this type of coverage and help you decide if it is right for you and your business partners.
What is Key Man/Person Insurance?
“Key Man insurance” or “Key Person insurance” is the term used for a policy that covers the life of a key person or employee of a company.
Key Man insurance protects businesses from financial loss resulting from the death or prolonged incapacity a key person within the company. This would also ensure continuity of the business.
Key Man policies provide compensation for a set monetary amount as stated in the policy.
Why do I need Key Man/person insurance?
This type of coverage is necessary if you own or are a part-owner of a company.
Many small businesses are privately owned and the owners or shareholders have the most financial impact if something happens to them. This can be protected by Key Man or Key Person Insurance. It is important to assess your business before you decide if Key Man or Key Person insurance should be considered. What if you or one your business partners die, or become severely incapacitated over a prolonged period of time? Would your company be able to continue operating and making the same profits as before? If you have the answer to that question, it is highly recommended that you talk with a professional about the possibility for Key Man or Key Person Insurance.
Once you have a policy in place, you can rest assured that your company will continue to operate and generate profits even if the worst happens.
How can I choose my Key People?
If something happens to a Key Person, they will have an immediate impact on the finances of the company. These people or persons could include directors, shareholders, managers, or any other person who has an important skill or knowledge that is essential to the financial stability and running of the company.
Insurance for Key Persons is designed to protect small and medium businesses’ net profits in the event that one of their Key People becomes seriously ill or loses.
A professional can help you understand the needs of your company. Many companies don’t realize that Key Person Insurance is available.
This article should have helped you understand Key Man and Key Person Insurance. I also hope that it has helped to make the decision about whether or not you want to pursue this type insurance for your company. This type of insurance is best if you speak to a qualified professional who can provide the right quotes for your company’s individual needs.