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Does My Business Need Key Person Protection?

September 10th, 2012 | Posted by Editor in Articles

If you run a business then chances are that you are well aware that your employees are your biggest asset. Irrespective of the size of your company, the people who work for you are precious since they manage the show and take care of various things for you. If you have found an employee or a few employees that have a higher level of competence than the others then you may notice increased profits and an improved customer relationship with important clients. In such cases, you should take care of this employee or employees since doing this can in turn ensure that your business runs smoothly at all times.

Finding and Keeping Competent Employees is Very important for Your Business’s Success There are many reasons why you should offer key person protection to the best employees in your company and one of these reasons is that, in case the key employee is injured or significantly ill and can no longer work anymore, then your business will not have to suffer in such a scenario. If you are in two minds about purchasing key person protection then you should ask yourself the following questions:

  • Will your company suffer financially if you had to replace the key person? Will your company suffer financially while waiting for this key person to be replaced?
  • Would any of your business relationships with clients, creditors or customers suffer if one or more key employees are not working with you anymore?
  • How much will it cost to replace the key employee if he quits, is significantly injured, falls terribly ill or passes away?

All Businesses Need Key Person Insurance

  • Key person insurance can fill the gap financially when the key employee doesn’t work with you anymore and you have to find another competent employee. Key person insurance ensures that you do not have to spend funds from your pocket for damage control when one of your former employees quits or cannot work with you due to other reasons. By purchasing this type of insurance plan you can do two things; ensure the financial stability of your business in all times and ensure that the most important employees in your company are taken care of when they are unwell, injured or have other problems.
  • There are various types of insurance covers available and key person insurance is usually flexible which means that you can alter the level of cover on the selected key employees. This is a must since circumstances change and so should your cover level. This type of cover allows you to select multiple employees and add them to your plan.
  • When you purchase a key employee cover from an insurer in Australia you will be the one to decide which type of insurance and benefits are given to the key employees. You can not only choose from basic covers such as life insurance but also advanced covers such as income insurance, trauma insurance or total and permanent disability insurance.

Author Info:
Article by Income Protection Insurance Au

This material is not intended to constitute personal advice, and must not be relied on as such. This information has been prepared without taking into account your objectives, financial circumstances or needs. Before making a decision based on this material, you should consider the appropriateness of this material having regard to your own objectives financial circumstances and needs. You should consider obtaining independent advice before making any decision.

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