Key Person Insurance Coverage Explained
If an employee crucial to the function of your business becomes unable to work, would day-to-day activity continue as usual, or would disorder and uncertainty ensue? Would you be able to maintain the same level of business expectations and revenue stream?
Key person insurance coverage can help you answer these questions with confidence. Key Person insurance coverage is designed to provide financial stability in a time of stress and anxiety due to the sudden loss of an important employee.
What Are The Benefits of Key Person Insurance Coverage?
Lots of businesses can benefit from having Key Person Insurance Coverage, like those with:
- Employees who would be extremely difficult, time-consuming or expensive to replace
- Highly skilled employees with unique training
- Employees with exclusive ties to key clients, like celebrities
- Narrow profit margins where a staff loss would mean financial trouble
Other Businesses May Benefit From Key Person Insurance Coverage If They:
- Need to protect their revenue stream from loss
- Would be devastated if a high revenue-producing client/celebrity became disabled and unable to perform
In the event a Key Person becomes unable to work, Key Person Insurance Coverage provides the company with income to make up for financial loss or use for temporary replacement costs.
Key Person Insurance Coverage vs. Key Person Life
Industry leaders point out that the chance of losing a key person to disability is 17 times greater than losing a key person to death, and the costs of hiring a recruiter to replace the key person and training him/her for a short period of time could be much more exorbitant than finding a permanent replacement. Regardless both products are available and should be considered for key people in your organization.
Key Person Insurance Coverage Requirements
The individual must be a consenting employee and you must illustrate that your business may incur substantial financial loss without him or her.
An ALIGNED Advocate can provide expert guidance about key person insurance and risk management best practices for your organization. Talk to one of our advocates today about how we can help you secure the best products, services and insurance solutions for your business.
|ALIGNED Across Canada 100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.|