There is plenty you can do to protect employees in the workplace, but could your busines survive if a key staff member or Director were no longer around?
I have recently set up two business protection plans for my clients, which I believe can add value to small and/or start-up companies.
Keyman Insurance
- Key Person Protection is a life insurance policy written on the life of the key person but owned by the business.
- A key person is an individual whose skill, knowledge, experience, or leadership contributes to the continued financial success of the business.
Shareholder protection insurance
- A shareholder protection plan can provide your business with a vital safety net if it were ever to lose a shareholder through serious illness, injury, or death. This is a scenario that nobody likes to think about, but it is important to plan for regardless.
- Shareholder protection cover is a type of Business Protection Insurance that provides shareholders with the necessary funds to buy shares from each other if one of them was to die or was unable to work due to a serious illness or accident. Most policies are life insurance-based but Criticall Illness Cover can also be included as an optional extra.
Benefits of Keyman and Shareholder protection insurance
- The main reason to take out Keyman/shareholder protection insurance is because it can help your business out during a difficult time. The loss of a keyperson/shareholder through death or illness can throw a company into uncertainty, especially if it were to happen unexpectedly.
- If a shareholder dies without a policy in place their stake in the business could be inherited by an unwelcome beneficiary or end up being sold to a rival
- Businesses do not need to save up capital or dip into their savings for funds to purchase an outgoing shareholder’s stake in the firm.
- For small businesses, shareholder protection can be vital since many smaller firms might struggle to raise buy-out capital at short notice.
