Every company is only as good as its best employees. In fact, having a good workforce is the only way a business can succeed. Within your company structure, there are certain people that are integral to the growth of your company. You literally can’t do it without them.
When your business is small, you will have to look for the most competent people available. To make sure that your company isn’t hurt by the sudden loss of one of your key players, there is something called key person insurance.
Since your small business is likely not making a profit yet, you may wonder if it is worth it to get this insurance or not. Is your business even big enough to warrant this extra expense? In this article, we will go over several factors to keep in mind to see if you should buy key person business insurance.
Is key person insurance necessary?
Take a look at the way your small business was started and how it runs currently. Were you a small group of people that had a common focus and all worked to your own talents to make the company a reality?
Or, did you have to scour the available recruits for some time to be able to find the person specialized enough to be able to do the job? If the answer to these questions is yes, then you certainly have a case for getting key person business insurance.
The reason being is that in the event of losing one or more of these people your business would certainly suffer. And a small business may not be able to survive such a hurdle. Luckily, there are policies that are suited to all kinds of budgets as there are various policies and addons that you can go for. Check out https://www.mykeymaninsurance.com/ for what some of the options are.
How much insurance does your company need?
Every business has a monetary number that can be fitted to describe how much of a calamity its loss would be felt. If the loss of a key person could sink your business, then how much of a revenue loss would be the result?
This is how you determine if the policy is going to be enough to cover your business to keep it afloat until the fallout from the loss of that person can be remedied.
You should shop around to get the maximum coverage that you can afford to pay for monthly. There is a big variance in price and coverage between companies so you don’t need to settle for the first quote that you get.
You are probably looking at a payment of between £100,000 and £1,000,000 so make sure to find one with the right number. The time it takes to remedy the situation should also be considered. If it takes a year to find the right candidate including the succession time for them to take over the workload then this should also be accounted for.