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Expat Keyman Business Protection Insurance

Expat Keyman Business Protection Insurance

What is Keyman insurance?

Keyman refers to key persons in companies or businesses (eg: senior managers or the managing director). Keyman insurance refers to one of insurances that a company may be insured according to economic loss brought by the death of its key managers or specialists.

If the key person passes away, their death to some extent brings forward economic loss for the company. Hence, a company under good management must buy keyman insurance to avoid causing economic upheaval to the company in event that the key people leave the world.

Key Man Insurance is related to standard life insurance, however the policy’s coverage does not extend past the period of employment of the individual (or key staff member) being covered. Simply put, if your organization obtains a Keyman Insurance Policy for a staff member, that policy will lapse should the employee being covered leave the company.

Why Key Person Insurance Matters

The loss of an owner or a key personnel whose contributions are vital for a business to succeed can be devastating. It can result in a drastic loss of profit, customer base and even reputation thereby rendering the business useless. Protecting your business against such risks is a prudent step toward business continuity, while addressing the concerns of your key stakeholders.

When a person or people in a business add so much value or even ideas drive the business forward then are not around for the business without them it may bring losses to business to certain extent. Key Man Insurance is a policy taken by an employer to mitigate financial losses in the event of a loss of key individual, whether it is the owner, important senior executive or a key contributor whose knowledge, work, or overall contribution is considered uniquely valuable to the business. Although it does not indemnify actual losses, the company will obtain a sum of insurance premium to make up for the loss so as to prevent itself from falling into the dangerous situation of liquidity problems.

Key Man Insurance Solutions

There are a number of situations that can occur where key man insurance plays its vital role in covering and protecting the business. One of the more rarer occasions is where if there are 2 directors of the company and 1 of the directors takes ill and dies, That leaves only 1 director around to continue to run the business. If he cannot run the business alone say due not having the experience of the other director. Keyman insurance has the ability for the family of the director that passed away to sell their share of the business and receives their value of the business for their 50% share. The remaining director could then have another director come buy in to the business and continue to keep the business running instead of the business folding.

Possible Uses Of Keyman Insurance
  • Business succession planning
  • Business loan protection
  • Legacy planning
  • Executive retention insurance

 

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