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If you have dependable members within your business such as a valuable employee, director, shareholder, leading salesman, top negotiator etc then should this person die or become critically ill, this could have devastating effects on your company and its finances.
Whilst many businesses and sole traders will happily insure their company cars, premises, office furniture & equipment and public liability to cover them against financial loss, many of us do not have keyman insurance.
Key Man Insurance or Keyperson insurance (also known as business insurance) is a life insurance policy which will pay out on the death or diagnosis of a critical illness of a keyperson such as a company director, shareholder, employee etc.
This way, your company can have sufficient funds to absorb any loss of profits or recruitment and training costs or even the funds to buy a shareholders shares in your company to avoid them being passed on to anyone else.
Imagine if your top sales person or sales manager was to die. How would this affect your turnover and more importantly your profit?
With a Keyman insurance policy already in place, your business can continue trading knowing that it will receive a cash pay out should the unfortunate happen.
These funds can then be used to absorb any drop in profit and also enable you to headhunt a replacement.
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