What is “Business Protection”? If you are a business owner, you may have heard of “business protection”, but what does this actually mean? The short answer is that there are different types of business protection, so let’s look at them one at a time. Finally, let’s look at Key Person Cover
What is Key Person Protection?
Put simply, Key Person Protection (also known as key man insurance or key person insurance) is a business insuring itself against the financial loss it would suffer if a key person in their business died or were diagnosed with a specified critical illness if chosen, during the length of the policy.
How does Key Person Protection Work?
Key Person Protection is a life assurance or life assurance and critical illness cover policy taken out to cover the life of a key person within your business. The policy is owned and paid for by the employer, so any payout is payable to the employer.
Why should I consider Key Person Protection?
The loss of a key person in your business could have a severe impact. The business could suffer badly, with sales and profits falling and increased workloads for the remaining staff.
Key Person Protection is designed to pay out a lump sum on the death of the insured key person, during the length of the policy. The lump sum could significantly help the business to recover as the proceeds can be used to help replace lost profit or with finding and hiring a replacement.