Take a moment and think about your business. Just what is your most precious asset? Your equipment? A product? Technology? Your reputation?
It is not a trick question and the response from the vast majority who read this article would say it is your staff and team. The very people that underpin your business are the same people who cultivate your reputation and ultimately drive your business forward.
If this is the case and you agree, think about this: why do we take insurance based on business risks but not people risks? Or rather, why do many small businesses not to take out insurance on the very people that make the business work?
Within any organisation regardless of size, there will be people in your business that you consider invaluable. They may possess specialist skills, knowledge, relationships, or leadership skills.
You may have people who are responsible for the vast majority of the turnover as they are key to sales within your business.
Consider what could happen to your business if something happens to one of these key people:
- Loss of revenue/profits
- Loss of specialist skills that were driving your product/service forward
- Loss of relationships with other organisations/people
In the event of losing a key person or that key person being diagnosed with a critical illness, a Key Person Policy can give your company the financial breathing space to overcome the hurdles that arise in just this situation. It can help with bridging gaps in lost profits, helping fund the costs of recruitment to find and train an alternative, repaying loans, ensuring that your cash flow remains healthy even in the most difficult of circumstances.
If your business is not protecting itself against the disruption that losing a key person would bring, would you have the means to weather the storm and survive?
Calculating the amount of cover needed comes down to several factors and is inevitably different for each company. At A-Plan we help you understand the risks and can guide you as to how to calculate a suitable amount of cover. It can be calculated using profits attributed to an individual, or in the case of a key person not directly responsible for revenue it could be a multiple of their earnings.
Whichever valuation is most suitable for your business, we can discuss the length of time a policy should be in place for and help you navigate the process of identifying the best insurer taking into account the key person’s age, medical history and lifestyle.
Worth considering, isn’t it?
To find out more about this, or other insurance options for your business, simply pop in or call your local branch. They will be happy to help you.