communication keys
Sunday, December 27th, 2009
Key Person insurance needs to be set at an amount that is enough, to cover any potential loss a business would suffer in the event of any of the things below occurring to a key person.
- Death
- Long-term illness
- Disabling injury
- Impactful Family Illness
If the person in your organisation is either, a key decision maker or a profit maker who has a period of service to your company it will pay to have Key Person insurance in most cases.
When considering the amount of insurance, and if it needs to be a consideration, there are so many different factors to think of.
- Will current contracts the person handles continue if they were not involved
- What would the expected fall in profits be with a disruption or ending of the person’s career?
- Would the fall in revenue and profits be short or long-term
- What would be the replacement cost and when considering this also things of the following things training,recruitment,advertising and time involved.
- Does the person have shares in the business and would you face a property or real money expense?
Typically, Key Person insurance is not thought about until a real problem arises and many financial and insurance advisors now offer Key Person insurance. The advisors from clever companies are aware that if they don’t advise clients that Key Person insurance exists, legal action could occur in the future.
The global business community is now such a litigious environment that anyone involved in financial services knows to offer clients their full cache of products. Sometimes this can be seen as the advisor just trying to sell a client but the availability of products needs to be communicated.
Key Person insurance can be surprisingly affordable and like most insurance can even seem cheap in the event of needing it.
When you stop and think about the type of business you run and how complexed relationships can be you may decide Key Person insurance is something you should acquire.
In many of the large global accounting and law firms partners receive a stake in the business and sometimes even an ongoing annuity when they retire. When you stop to think how involved these executives are as senior partners the losses can be impactful and long lasting.
You will often see corporations insisting that key executives do not fly together and cold as it sounds from an exposure viewpoint it makes perfect sense.
Take a moment and think about your key people and the relationships they have built up whilst working for your organisation.
Do you have a link to most of the people they do business with and would the relationships and accounts be safe if your executive was gone tomorrow.
Many leaders these days run their businesses from a distance and this means the connection clients have is a remote one.
Even in these times of great automation and online communication people still like to deal with other people and the real dollar value of your key executives may be greater then you first thought.
About the Author:
Paul Ingersole is an Australian based business person who enjoys writing.Paul discovered a great system that makes small continuous recurring profits using the internet.You can see Google Sniper at Paul’s website
Article Source: ArticlesBase.com – Should you have Key Person Insurance for your business?
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