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Planning for the unexpected isn’t always possible when running a business, but a keyman insurance policy is a great way of keeping your business afloat during tough times. Keyman insurance is a type of life assurance policy that can be taken out on a key member of your team. Whether they’re an employee to director, partner or proprietor, a keyman insurance policy will make sure you have the cover to help you look after your operations when top team members can’t there. Let’s take a closer look at what keyman insurance can do for you and your top team to ensure your operations stay up and running for the years to come.

What is keyman insurance?

Keyman insurance is a safety net for businesses who rely on specific team members to keep operations up and running. A business simply cannot survive without its staff, but with a keyman insurance policy by your side, you can ensure the plain sailing of your operations if something were to happen.

In simple terms, a keyman insurance policy helps a business with any financial losses it would suffer as an effect of the death or serious illness of a key team member during the term of the policy. It’s worthwhile to remember that the business could be the sole beneficiary in the event of a claim. Keyman policies most commonly cover the cost of any potential lost profits, loan repayments or the costs of replacing staff members who are crucial to the business.

These policies can be set up in two ways, the first being to cover life assurance only, the second to cover life and critical illness. Both policies will compensate the business against the severe impact of the loss of a key person to ensure that you can carry on even through the toughest times.

Who are my key team members?

Choosing which members of your team to protect with a keyman insurance policy can seem like quite the task. When it comes to keyman insurance, your key person doesn’t always have to be your top salesperson. This choice will really depend on your company, industry and values, with each business having various workers across operations that are essential to profits and results. In fact, the creator of your business’s intellectual property or a key member or your design team may be just as valuable as some of your team managers or board members.

Many of the key people businesses insure under a keyman insurance policy are typically directors and managers, but as far as the underwriter is concerned, as long as there is an insurable interest it’s reasonable for that team member to be considered for a keyman insurance policy. Everyone within your business will be linked to profit in some way, shape or form, so selecting to protect your top performing team members will ensure that the business keeps moving forward in your time of need.

When is the right time?

Keyman insurance benefits the whole business as it helps to ensure continuity. There are many times and stages that you should consider keyman insurance, from starting out your firm to having a more established organisation, taking out a keyman policy is something worth considering as you grow your operations. Staff are the greatest asset to any business, and it’s important to think that losing an important person may not just hit profits hard from the disruption to operations but could also cause uncertainty. Problems with operations might be stressful for other employees and could lead them to become concerned about their job safety, which isn’t great for morale. By having a keyman insurance policy for your top performers, you’ll show them how much you care as an employer, ensuring morale and productivity stay high.

Ultimately, keyman insurance helps to alleviate periods of uncertainty within your business. The payout from the policy is there to ensure that your operations can continue to soar both culturally and financially to keep the business moving even if it loses an important member of staff. There is never a bad time to cover your business and your team, and a keyman insurance policy is a great place to start.

There are many measures you can take in the workplace to protect your employees from harm, but could your business survive if a key staff member or director was no longer around? At Protectus, we understand that keeping your business on top form 24/7 is a priority, that’s why we’re on hand to help find you the most suitable keyman insurance policy for your top team. Get in touch for bespoke insurance advice that’s tailored to the needs of your business.