Key Man Risks
As a company you insure your cars and your equipment against disaster like fire and flood, and include compensation for loss of profits as well as asset replacement.
Do you insure your company's cash flow against loss of key members of staff to death or disease?
Draw up a list of your key people who, very broadly, are those whose skills are such that no one else could step into the breach should they die suddenly of a heart attack or the like.
In most companies the directors are key people, as are the star salesmen, business drivers, and possibly certain technical staff.
Ask yourself what sort of damage their loss would entail. This can range from the catastrophic (in the event of the death of an owner director this can result in the calling in of all debts, bank overdrafts etc and subsequent failure of the firm) to the difficult (the death of the top salesman may cause a new business famine and subsequent cash flow difficulties) to the merely expensively inconvenient (e.g. hiring a consultant locum at £500 a day for several months while a new person is recruited).
If you consider that you have a potential problem then you can insure against it using key person policies.
We can help conduct an audit for you and assess what sort of coverage you might need.
Last updated on April 6, 2012