Key Person Insurance
Which event would cause the most damage to your business?
- The company car is stolen.
- The business property is vandalised.
- The company computer is stolen.
- A company director has a heart attack.
Almost every business will have the car, property and computer insured. However, statistics show that over 90% of businesses don't have adequate insurance for their most important assets... their key people.
A key person may be a company director, the business owner(s), or possibly a key employee. The departure (permanent or temporary) of a key person should have an effect on the revenue of the business. Key person insurance is designed to financially assist the business until the key person returns to work or until a suitable replacement is found.
What does Key Person Insurance cover?
Key person insurance provides business with the following benefits:
- Compensates the business for lost revenue
- Provides funds to hire a suitable replacement
- Protects the business profits
- Maintains the value of the business
When will a Key Person Insurance benefit get paid?
- Death of a key person
- Total & Permanent Disablement of a key person
- Serious illness to a key person (ie. cancer, heart attack, stroke)
Are there other issues that need to be factored in?
Key person insurance is a complex issue that needs specialist attention. Questions that may need answering are:
- How much cover does our business need?
- Who are our key employees?
- Can the policies be held within superannuation?
- Are there are any taxation issues?
- What is the most appropriate insurance policy?
- Are the premiums affordable?
Day Financial provide specialist advice in this area and can work with you to provide your business with risk management solutions.
Contact us today for a free initial appointment.