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Key Person Insurance: How It Works

 
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Whether it’s a great leader, a CEO, or an HR director, every business has a few employees that they just can’t afford to lose. For many companies, losing a vital member of staff means financial losses and dips in productivity. But did you know that Key Person Insurance is a type of cover that prevents these costly losses?

Key Person Insurance can really benefit your business and protect the most vital asset a company has, it’s people.

Should you take out Key Person Insurance, a few key personnel will be listed on your policy. These would be the people who matter most to the operation and direction of your business. This means that you’ll need to sit down and think carefully about who should feature on this policy.

What does it offer cover against?

A policy like Key Person cover offers compensation for losses, injuries and incidents that might leave you understaffed due to incapacitation or death. In the event of the passing of a staff member listed on your policy, you would be able to claim. The proceeds of your claim could be used to find a new staff member, train up an existing employee to fill their role, or hire a temporary replacement until a permanent one is found.

Cover in the event of a worse case scenario

Should the loss of a key person leave the business in financial ruin, you can use the claim proceeds to wind up the business with little financial hassle. Although this isn’t an ideal situation, you’ll at least have a little financial relief in the matter.

Are you properly covered?

With so many elements to manage within a business, it’s no surprise that so few companies have this type of cover. Sadly, many business owners only realise its importance, once a tragedy has occurred that leaves a vital member of staff incapacitated or deceased.

Could you afford a costly loss or incapacitation?

As mentioned above, many business owners only know the answer to this question once it is simply too late. But you don’t have to leave this to chance; the right policy could make all the difference. If you think your company might benefit from a policy just like this one, why not chat to a Compendium broker? We’re more than happy to contact you at your earliest convenience and tailor this cover to suit you. For more information click here or call us today: 031 242 6800.




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