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Most every business – regardless of size – has at least  one or  “key” person(s). That key man or key woman  is absolutely vital to the business. It can the owner, administrator, salesperson, technical champion or anybody else that has skills and knowledge that might hard to replace.

Business insurance is used to protect the business  from financial losses that would arise from the death (or extended absence) of that key person .

Keyman Insurance is a life insurance, TPD insurance or trauma insurance policy that is used for business succession or business protection purposes. These policies are usually owned by the business and the aim is to compensate the business.

An employer may take out a key person insurance policy on the life or health of any employee whose contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained). These are extra costs and/or losses that the employer is likely to suffer if it looses a key person.

The broad term Keyman Insurance is a “catch-all” term. Different types and purposes of insurance cover depending on the need of the business.

The main types of Keyman Insurance include;

  • Keyman Insurance
  • Buy / Sell Insurance
  • Debt Protection (Personal Guarantee)
  • Revenue Protection

Your business structure, levels of debt, nature of agreements and specific needs means that there is no standard  or “ out of the box” solution.  So, if you’re concerned that a death or long-term absence would hurt your business then contact me for advice.