How can Key Person Insurance protect your family and your business? - PKF Francis Clark
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How can Key Person Insurance protect your family and your business?

The pandemic has had a massive effect on lives across the world. In particular, the food and drink sector has had to cope with their businesses being closed for large parts of the pandemic. The landscape for the industry is looking better, so now might be a good time to review your own position and the protections that you have in place for your family and your business.

You can insure virtually anything that is valuable to you – your life, your home, your pets and even your phone. But many people forget to consider what would happen to their business if they or one of their key employees die or contract a life-threatening illness.

52% of small businesses believe that they would cease trading within a year should one of their key people die or contract a serious illness*

A Key Person Insurance policy can be taken out to protect the firm against this scenario. The policy is paid for by the business and used to insure a key person within the firm. If a key employee dies, such as a Head Chef, the policy provides funds to the business.

51% of companies have debt which is not protected by an insurance policy*

The proceeds can be used for a variety of reasons: to repay a bank loan, to protect against loss of profit attributed to the key individual or to provide funds for trading whilst a replacement is found.

63% of businesses said the death of an owner would have the biggest impact on the business, but 40% have no continuity plan in place*

Key Person Insurance can be introduced alongside other protections and legal agreements to ensure you give the business the best possible chance of carrying on in the event of an untimely death. Many hotels and restaurants are dependent on a few specialist individuals to make sure the business functions profitably. A Key Person Insurance policy is designed to protect your business.

Does your business have any key individuals whose absence would affect the successful running and profits?

Taking action now could protect your business should the worst happen during the remainder of this pandemic or any other unforeseen event that could undermine the years of hard work you have put into establishing and making your business a success.

If you would like to discuss the above and how you could protect your business, please get in touch.

*All stats from Legal & General State of the Nation SME Report October 2019

Other articles you may be interested in:

It’s all about employees – retain your staff and know your customers

How technology can be used to capture data

How the new Restructuring Plan can help businesses in the food and drink sector

Going concern – a hot topic in financial reporting

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