Small business owners have the responsibility to implement multiple levels of protection to keep the business running smoothly. Whilst larger companies tend to have a dedicated team who focuses on safeguarding the business, small-scale entrepreneurs have to deal with a variety of liabilities without the same security means. Aside from this, small businesses are not exempt from legal issues and are very much regulated by the same laws guarding big businesses.
It is important that we discuss some sure-fire ways to protect your business from risks, whether from limiting the possibility of a lawsuit to covering financial loss and reputation damage. One such way of protection is through key-man insurance. In this article, we will tell you the basics of this insurance policy.
What is a key-man insurance?
The easiest way to describe this kind of insurance is that it is an insurance policy taken out by a business to compensate for financial losses that may arise from the death of a major stakeholder. This ensures that the transition from the death is as smooth and stress-free as possible. This policy involves writing legal agreements on how the shares are to be managed in case a stakeholder passes away.
What are the benefits of key-man protection insurance? Why should I get one?
1. A safe and stable business plan
Today’s business environment requires businessmen to have a safe and stable business plan. The transition when having a deceased shareholder is guaranteed to be full of conflict and may jeopardise the strength and unity of a business. However, if you have key-man protection insurance, you will enjoy a total peace of mind that financial losses will be covered. This means the business will return to normal operations as soon as possible.
2. Support for family members
Most shareholders understand how to manage their assets. However, inheriting family members often have no idea how to do this. Most would accept cash as this is more useful for them. Another great thing about getting key-man insurance is that family member or members are sure to receive cash payments.
3. Illness and disability
Aside from death, this insurance policy can also be used to cover serious illnesses and disabilities. A sick shareholder will be able to sell shares to continuing shareholders, given that the right agreements have been put in place.
Ready to start with your key-man insurance policy?
Heritage Insurance Services was formed by industry specialists to offer everyone free advice on protecting the things most important to them – their family and their business. Now with over 12 years’ experience, our aim is to offer outstanding value and security to all our customers and continue to grow as a company through recommendations. If you need quotations don’t hesitate to call us on 02392 000 959.