Anyone from a director to a sole trader should be looking at the business risks of not having the correct insurance. It may be a case where the company does not fully understand the risks involved with not having cover. People are always looking to take out insurance when setting up a business and more often than not they look at indemnity and liability insurance first, then look at insuring their varies office equipment. It is just not in human nature to look at the fact that they or their co-workers may die or become ill and not be able to work anymore. But what is a key person and do you have them working within your company?
Various positions that may require insurance
- IT Manager – How important is your IT manager? If your company is heavily reliant on IT then think about the potential problems that would arise if your IT manager was to become ill or die?
- Top Sales Person – Many UK companies are heavily reliant on their sales team for the income. It’s often the case that some are better than others. The skills required to be a good sales person are extremely varied and it often comes down to personality as well as knowhow and customer relations. What would happen to your company if you lost your top sales executive? Can your company afford to run if that person was to die or become ill?
- Director – Ltd companies always have at least one director. Some directors may be more important than others but more often than not there is always a director within the company that is invaluable. Directors are often the brains of the company or the person with all the contacts.
- Manager – Although directors are obviously important we often find that the day to day running of the business is carried out by a manager of some kind. These are the people that know the company inside out. If you have a key manager within your company these people must be insured. Directors may know some parts of the company but do not necessarily know how the day to day jobs are done.
- Webmaster – More and more companies today are reliant on website traffic and enquiries for their business. In fact some companies are 100% reliant on the internet for their business. A high percentage of our clients are online start-ups or successful established online sites. These companies will always have a webmaster or website designer who is absolutely key to keeping the site running. It maybe that you have an in house search engine optimization expert who keeps your company at the top of the rankings. The knowledge these people have is extremely valuable and sometimes irreplaceable. These people must be insured.
- Celebrity or a “face” of the company – Companies are often run off the back of a celebrity name or the brand name of a company. We set up lots of policies for companies run under the name of the main person. These people are obvious candidates for insurance.
- Skilled Workers – Do you have skilled workers within your company. You may run a design business of some kind or maybe a small manual factory which requires highly skilled and experienced people. Manual workers are possible more susceptible to injury and of course illness can stop someone carrying out manual duties quite quickly.
- Doctors, Scientists – These occupations require years of training and experience. You may run a company which deals in health or pharmaceutical industries. It’s extremely difficult to find these types of people and it may require huge sums of money to replace them.
The UK Government is pushing for more lending to small and medium size businesses and are also pushing start-up companies and are trying to make it more easier to start a business with business loans and other options of finance. However, all of this is promising for small to medium businesses but they all require Keyman insurance. The Government and the banks acknowledge the importance of the cover and most lenders make it a condition of the loan to take out a suitable key person insurance policy.
It protects the lender against losing their money due to the key person dying or not being able to work. If they can sufficiently cover this risk; then they are more likely to lend and therefore help the overall market conditions. If you think you may need key man insurance, the likely hood is you do. We strongly recommend you contact an independent key person insurance specialist who would be able to guide you through the maze that is business insurance and find you the most suitable product at the best price. To ensure you obtain the best price, you should make sure the adviser you are using is whole of market and isn’t tied to any particular provider.