As a business owner, it is very crucial that you plan for the unknown. Have you ever thought about what could happen if you were unable to attend to your company’s need due to unforeseen circumstances? You need to consider an insurance policy that protects your business in the event you (or a key person of your organization) were not able to perform.
Key man insurance, also known as key person insurance, is a very important business insurance that unfortunately sometimes business owners do not consider. A key man insurance policy provides a business with coverage for financial losses that would result from the death or extended incapacity of an important member of the business such as the owner, director, president, Chief Financial Officer, Chief Executive Officer or Chief Technology officer. A key person is usually any individual who is directly associated with the business and who, in case of death or disability that will cause no performance, can cause a financial strain to the business.
The coverage of the Key Man insurance policy includes compensation for:
- Losses related to the period when a key person is not able to perform or work. The coverage usually includes compensation for recruiting and training a temporary personnel.
- Lost sales as a result to loss of income due to delay or cancellation of project that a key person was supposed to lead, integrate or implement on in order for the company to deliver.
- Enabling shareholder interests to be acquired by existing shareholders.
- A guarantee for anyone involved in a business loan.
For additional information on Key Man Insurance Policies, give us a call at 714-258-2800.