Business proprietors recognise the need to insure their company property, equipment and fixed assets. However, they continually overlook their most important asset, the people that drive the business. Businesses could face devastating financial problems without a succession planning strategy in place. Would you be happy for a non-suited person to become involved in the running of your business?
Business Protection Assurance can be an inexpensive solution. Below is a summary of the main solutions available.
Keyman Insurance is an insurance policy which a company takes out on any of its key employees or directors. The key people are usually the staff who are very important and of great value to the business. The company would suffer financial loss on the death or critical illness of these individuals. The insurance proceeds could be utilised to perhaps fund the recruitment of a new member of staff or to simply replace any loss of profits incurred.
Shareholder Protection is an insurance policy put in place to protect the shareholders. The policy would pay out a lump sum on a shareholders's death or critical illness to allow the remaining shareholders to purchase the deceased shares. This avoids a non-suitable person from being involved in the running of the business.
Partnership Protection is an insurance policy put in place by the partners of a business. The policy would pay out on a partner's death or critical illness which can be used to buy out the deceased partners's share of the business. This avoids a non-suitable person being involved in the running of the business.
If you lose a key person who acted a guarantee for a business loan, this type of insurance could pay off the loan. A Business Loan Protection Policy can cover death or critical illness for a specified term.