Business protection policy helps to protect your business should a director, partner, member or key employee suffer a critical illness or die, it’s also known as key person insurance or key person protection. Such insurance is needed if that person’s death would be devastating to the future of the company and, having this financial protection in place is vital in allowing businesses to recover quickly, keep the business trading and minimise the impact should the worst happen. The money can then be used to find a replacement. The main purpose of key person insurance is to help the company survive the blow of losing the person who makes the business work and the benefits of a key person insurance policy can be triggered by death, terminal illness, critical illness or even absence through sickness. 

Key Points of Key Person Insurance: 

• A key person can be any individual who significantly contributes to a business’s financial success due to their skills, knowledge, experience and leadership. 
• Only you can decide if a person is key to your business. It could be someone who brings revenue into your business, someone who’s integral to the image of your business, or is pulling the strings behind the scenes. If their absence affects your operation, then they can be covered by key person insurance. 
• The company takes out a policy on the key employee. The company pays for the premiums and is the beneficiary of the insurance policy in the event of a claim being made, which means if the insured employee dies within the term of the policy (or) diagnosed with a critical illness(if added in the policy), the company will receive the pay out for that key person. 
• It’s also very important, if the business reputation and financial viability are critically linked to the key employee’s name, reputation or unique skills and the key employee’s death could potentially end the business (or) it could quickly threaten the company financially. It can also be beneficial if the business is a partnership and each partner wants to be able to buy out the other’s shares in case of an untimely death. 
• As we all know, business success requires the confidence of your stakeholders, from customers to suppliers, bank managers, employees and losing a key person will often have a detrimental impact on that confidence. By, receiving an injection of cash from a key man insurance policy into your business can help it to survive short term, while allowing you to take steps to maintain that confidence in the longer term and it will also allow you crucial time to find the replacement of that key person. 

 At Crown Financial Ltd, we have number of insurers where we can talk you to through to the different options and advise you on the most suitable business protection cover.

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