Business interruption isn’t just about your material assets, the success of a business can often depend on its people. The sudden loss of a key person or shareholder can prove devastating to a business and can cause long-term, irreparable damage. Their specialised knowledge, skill set or contacts are usually vital to the profitability of the business. This is where Key Person cover comes in.
A key person policy is designed to pay out a cash sum if the person insured:
- Meets the terminal illness criteria of insurers
- Becomes permanently totally disabled (if you’ve chosen additional critical illness cover)
52% of businesses would cease trading in under a year if a key person died or became critically ill.1
An example of how key person cover can help your business.
Guide Me Home Limited is an innovative specialist IT Company. The business relies heavily on Mr Axelrod, the Chief Technical Officer’s specialist skill set.
In the unfortunate event of Mr Axelrod becoming critically ill or dying, the business would notice an impact on the loss of this specialist skillset which could therefore effect business revenue.
To get back on their feet, the business will need to recruit a replacement which could take some time, due to the specialist knowledge required.
Opting for key person cover could provide the funds to help deal with these issues, see below.
Aston Lark has a specialist Employee Benefits team that can assist in guiding you through the process of deciding on the appropriate amount and length of the cover. As a whole of market broker, we can source on premium and cover to get your key people covered, and your business protected.
To check whether your company and you have the cover you need, please contact Aston Lark Employee Benefits on 0207 543 2818 or make an enquiry here.
1 Legal & General’s State Nation’s SME report (May 2019)