Introduction
Whenever your business loses an employee it can be both emotionally and financially devastating. This is especially important whenever your business considers this person to play a key role within your business. However, you can actually be prepared for this to happen. You simply need to learn about key insurance and then purchase it for your business.
Important Information About Key Employee Insurance
Key insurance exists in order to protect your business’ finances whenever it loses an important employee due to either them becoming disabled or dying. It is important to note that most businesses lose these employees at the ages of 45, 50 or 55. This is more likely to happen than it is for your business to sustain loss because of fire. Therefore, it is vital to have this type of insurance on your most important employees before they ever near that age.
Important Considerations About Key Insurance
There are some factors that you must take into consideration in order to determine whether or not an employee plays a key role within your business. A person is usually considered to be a key part of your business if the loss of their experience, knowledge, leadership or business contacts would adversely affect just how profitable your business is. If your business is going to be severely affected by the loss of any of these things if they were to lose a particular employee, then you should have key insurance for this person.
Depending upon the size of your business, you may not have a lot of important or “key” employees. However, in this case it could actually be more important for you to have key insurance than it would be if you did have a lot of key employees. This is especially true if you are the owner of a small business because these businesses will usually have a smaller workforce in which each and every employee plays a vital role to the company’s overall success. Nevertheless, this is actually when you need key insurance the most. In fact, you may actually be quite surprised to learn that some lenders will actually require that you show them proof that you have key insurance before they will even consider approving you for any type of small business loan. So, clearly you can see just how truly important key insurance is.
Why You Should Have Key Insurance
While you can already clearly see why a small business has to have key insurance, you may be thinking that it would not be as important for a bigger business to have this type of insurance. If you think this though, then you are actually quite wrong. Even big businesses need to have this type of insurance in place because it will indemnify your company of any financial compensation that you may incur as you try to replace the key employee that you have lost. Whenever you are given this type of financial compensation from key insurance you will be allowed to use it only in order to train or to hire another key employee to fill the vacant position that was left within your company.
