When it comes to your business, you want to make sure that whatever happens in the future you are able to handle and continue to thrive. Right?
From Brexit to interest rates and commodity prices it’s easy for a business owner to focus on the things that could impact the bottom line. But have you every stopped to think what might happen to the business if something happened to the key people behind the business?
What is a key person?
A key person is any individual whose specialist knowledge or skills; industry reputation; client relationships; creativity, or vision & leadership are critical to the on-going success or growth of the business.
Examples of Key People:
- Business Leadership
- Design Innovators & Creatives
- Technical Experts
- Specialist Skills
- Senior Sales Professionals
- Senior Relationship Managers
So what can you as a business owner do to mitigate and protect your business should the worst happen to a key person?
An example of the impact of Key Person Risk
Meet Jenny. Jenny is Head of Production at Widgets ‘r’ Us and is highly regarded by the board for both her direct and indirect business impact.
Find out what happened when Jenny got some news that would impact her and Widgets ‘r’ Us…
What is key person risk insurance?
Key person risk insurance can protect against the financial loss of a key person dying or becoming seriously ill allowing your business to trade normally and continue on your course of growth.
Upon the diagnosis of a serious illness, Key Person Insurance can provide a lump sum payment and provide sufficient capital to allow the directors to recruit an appropriately skilled person to fulfil the role in the absence of the key person.
Some key questions to ask yourself
Do you employ anyone in your business who…
- Has specialist technical knowledge / responsibility?
- Is responsible for major client relationships?
- Is responsible for a significant proportion of sales / profit?
- What would be the impact on the business if they were to die or become seriously ill?
- Would the business continue to trade normally?
- What would be the impact on the future of the business?
- Growth / Expansion
- Acquisition / Sale
- Client Relationships
Employees are the lifeblood of any business. Whether they’re supporting the daily business operations, driving new business or improving efficiencies to improve the bottom line, can you realistically replace their knowledge, experience and value? If the answer to this is anything but a yes, then you should consider investing in the right key person risk insurance policy.
For help in planning, preparing and initiating the right key person risk insurance scheme or for more information on business protection schemes, contact one of Menzies Wealth Management’s regional representatives:
Contacting Menzies Wealth Management
Menzies Wealth Management
7-12 Tavistock Square
Menzies Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. FRN: 486548.
Telephone: +44 (0)20 7387 5868