Key Person Assurance

In every office, shop or factory in the country there is a notice proclaiming that the employer has taken out insurance to cover accidents to employees at work. Every car or lorry owned by a business has to have at least the minimum level of insurance required by law. Most prudent business people will have arranged for insurance on the factory, office buildings, even on the desk at which they work.

But one valuable business asset is often left uninsured. Too few businesses have any insurance to cover the one eventuality that can literally mean the end of the business and the income it provides - the death or illness (including critical illness) of a key person.

Whether the business in question is a partnersip, a limited liability partnership, a company, or even a sole trader, it is likely to have an individual, or individuals, crucial to its continued activities and prosperity.

Key person protection, through a life assurance, critical illness, income protection plan, or a combination of all three, can provide a cash injection (either as a lump sum or as a flow of income) to the business if a key person dies or suffers a serious illness, allowing the business to continue trading at a time of considerable uncertainty and financial pressure.

Amongst other things, the following main issues need can be covered:

• Loss of profits suffered until a replacement is found, is in place and is fully effective;
• Pay for the often substantial costs of recruitment and training of a replacement;
• If absence is due to critical illness and a return to work is on the cards, pay income to the 'absent' person and also fund the cost of a temporary replacement.