Protecting your business in the case of long-term absence or death

Key Person Protection

We understand business. Our founder, and managing director, Adam Rhodes has grown Rhodes Wealth Management from a single financial advisor in Derby to a thriving company employing over 25 people. His invaluable experiences building a successful company from the ground up are an essential part of our business and corporate financial services. We can help your business seize opportunities, overcome obstacles, and ensure you not only meet your employer obligations but help your team thrive.

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Protecting your business, no matter the circumstances

Key Person Insurance for Businesses

As a business, there are many steps you can take to protect and grow your finances. Employing the correct people for your company is key to making it function properly, and some of these people are more vital than others.

Here at Rhodes Wealth Management, we offer tailored key person insurance and protection, so you can place precautionary measures to protect your business. Losing a key person can be difficult enough, and key person protection gives you the reassurance that your business will still be able to operate.

What is key person protection?

Key person protection helps businesses maintain their finances and operations if a key person becomes terminally ill or critically ill, or dies. The insurance can be used to provide safety in the absence of a key person and help your business to continue trading, whilst tackling a number of other issues that may occur in the absence of a key person.

Do I need key person protection?

Small businesses are likely to need key person protection. If a founder, owner, or crucial head of department were to fall critically ill whilst a small business is still growing, they may be liable to a high loss of profits and business functionality. Key person protection will provide your business with the means to continue operating by protecting profits, funding recruitment and trading, and helping to prevent losses.

When considering protecting your business with key person protection, it is important to consider:

  • What would happen if a shareholder/director were to become critically or die?
  • In the absence of a key person, would your company be able to trade?
  • How much would it cost to replace the key person?
  • Would their beneficiaries want to be involved? What would they want to do with the business?

Having adequate business protection in place could help resolve these issues, and can aid you with the money to tackle these shortfalls.

Who is a key person?

A key person is somebody who plays a vital role in the business operations and financial success of the company. These can range from the business owner, who sets the business strategies and controls the company moving forwards, to top salespeople responsible for maintaining financial success. A key person may also be identified as somebody in the business who knows things that nobody else knows.

These are determined differently per company, but the importance of a key person can be defined by a number of factors:

  • Skills, experience, knowledge, and exceptional talent
  • Leadership, communication skills, and key relationship management
  • Creative specialists, IT system managers, research and development staff
  • Web developers, sales leads, technical experts
  • CEO, owners, founders, and managing directors

Not every key person will have the same role and impact in every business. Understanding who your most critical people are in your business will help you establish a clear-cut and effective key person protection plan.

What does Key Person Protection help Protect?

Once you have key person cover in place it’s important to understand how this will help protect your business. Knowing how your key person insurance policy works for you will help reassure you that your business will be able to operate, even in the absence of a key person.

Loss of profits: if key people in your business are absent due to a critical illness, or death, a key person protection policy can help cover the loss of profits that may occur as a result.

Recruiting and training a replacement: replacing a key employee will add an amount of stress and pressure to your business. Key person protection will alleviate some of the worries when it comes to funding recruitment and training to bring your business back to its feet.

Loss of personal or business contacts: it may be that your key person’s contribution to business relationships was critical to the businesses functionality. The financial issues the loss of contact may cause can be supported with critical illness cover.

If the relationships that your key employee maintains suffer as a result of their absence, your customer’s and suppliers confidence may also falter. Having a key person insurance plan in place can help you prepare in advance of any absence.

Business loans and debts: Your business may be tied up in debts and loans that, in the absence of key people, may become unmanageable. Critical illness cover can help your business maintain and manage financial issues that may develop as a result of absence. This may protect business debts, protect business profits, cover penalties for disruption of delivery of services, among many other financial stresses.

Benefits of key person cover

Key person cover can bring reassurance and peace of mind that your company will be protected should anything happen to you or your key persons. Your business will be significantly less at risk in the absence of a key person.

Some loan repayments may require you to take out key person protection so that the loan can also be protected. This will reassure both your company and the lender that the loan can still be repaid should a key person die.

Key Person Protection with Rhodes Wealth Management

We take the time to understand what factors will be affected in the absence of a key person and protect your business in the way you need it most.

Whether you’re a small business seeking key person protection, or are redeveloping your business strategies and require more protection for your business, Rhodes Wealth Management’s financial advisors are available to help.

Contact us today to find out more about how we can help protect your business.

 

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