When deciding on whether to take out life or some kind of income protection cover for your key employees, there are a number of variables that need to be taken into consideration. If you don’t take out the right level of cover, you can leave yourself or your business exposed should anything happen to you, or any of the other key people within your business.
If your business’ success and profits rely heavily on the input and performance of one employee, then you should definitely consider taking out some kind of insurance policy to cover the business should anything happen to them.
Whether it be death, disablement, illness or injury, it is wise to make sure you have covered all the alternatives and unforeseen events that might prevent this key person from working.
Losing managerial skills, expertise and leadership of a key person within your business could result in incurring substantial financial losses as well as an overall reduction in business profitability. A number of other costs may also be involved in recruiting and training a replacement that is suitable to the business.
Other negative impacts to the business might be:
- Loss of the business’ goodwill
- Unable to repay debts
- Loss of revenue
- Having to rehire more people
This type of insurance can sometimes be expensive which is why it’s a good idea to consult your accountant and financial planner first. But the cost of not having the cover could be extremely higher should you end up with some kind of long term injury or illness.
Before you make your decision, you should compare a couple of different life insurance and wealth management companies, and see whether they offer some kind of insurance for key persons.
Be sure to stick around and visit this blog regularly to make sure you stay up to date with all the latest news and advice when it comes to protecting your greatest asset – yourself!