Running any business carries with it a number of risks.
Those that relate directly to business trading are easily recognisable and are the focus of every management team’s efforts, yet financial risks are equally important and can often lead to business failure if they remain unmanaged.
Key Person Insurance
Key Person insurance is a protection policy designed for a business or commercial company. The insurance policy is designed to cover the company for any financial loss of income, revenue or wealth generating contracts if any of the companies key people were to die. The insurance can also cover the key person if they were to suffer a critical illness, that is an optional addition. A key person could be the Chief Operating Officer, General Manager, Sales Director or any other employee deemed to be in a key position.
Shareholder Protection insurance policies are designed to protect a business and especially the shareholders to provide a clearly set out succession plan on the death or diagnosis of critical illness for one or more of the named shareholders. The protection policy provides the necessary funding for any remaining shareholders to purchase the deceased’s shares that were in the business. This also means that any relative or beneficiary of the deceased will get fair value for the shares and protect the business against unnecessary probate or legal argument.
Business Loan Protection
Business Loan Protection is an insurance policy that is used to cover and borrowing or debt that a company may have. The policy is to protect one of the Key people if they were to die and/or become critically ill. The policy will pay out the cover amount to help the business clear any outstanding debt or loan that is in place. Debts could include investment into the business, shareholder loans to the business, overdraft facilities, loans, funding, invoices due, creditors or commercial mortgages.