Why you should Consider Key Person Coverage
As a California small business owner, no doubt you’ve invested in insurance coverage to help financially safeguard your business. One insurance policy that may be vital to your business, but is often dismissed as an unnecessary expense, is key person insurance.
In a small business, the responsibilities are spread amongst a few employees, and if one of those key employees were to experience a disability, serious illness or worse, how would your business cope? Key person insurance is designed to safeguard your business against the disruption this scenario would likely cause. Depending on the coverage you choose, the policy may provide your business with a monthly benefit or a lump sum payout.
Here are the three main uses for key person insurance coverage:
• Either to reassure your financial backers of the ability of your business to continue trading, or pay back business debt.
• Help replace lost profits due to the absence of the key person.
• Recruit, hire and train a permanent or temporary replacement for your lost key person.
As you can see, the loss of a person key to keeping your business financially afloat and running smoothly can be a disaster. By investing in a key person insurance policy you may be helping to financially protect your small business against the unexpected loss of a vital employee or business partner.