Protect Your Business with Keyman Insurance Quotes
Revenue Protection Quotes
Capital Protection Quotes
Quotes from 12+ Insurers
How does Keyman Insurance work?
A keyman policy works in the exact same way as a normal life, trauma or TPD policy only the business is the beneficiary of the cover and a key employee is the insured.
If that key person was to pass away, become totally and permanently disabled or suffer a critical illness and was required to leave the business, the lump sum benefit would go to the business.
It can help cover:
Loss of staff: You may be required to hire a temporary or permanent replacement for the exiting employee
Lost revenue: If the staff member was responsible for bringing in significant business or revenue, the lump sum payment can help offset this
Payment of business loans for which exiting employee was a guarantor
Funding of purchase of shares of exiting employee
Policy Types Available
This type of cover protects against lost revenue as a result of a key person exiting the business if that person brings in significant revenue, as well as covering the wages or salary for hiring a replacement or the costs of searching for a replacement.
Ensure your business has the necessary funds to pay out any outstanding business loans with Capital Protection insurance should a key person who acts as a guarantor to any business loans pass away. You may also want to make sure you cover any overdraft facilities.
Buy/Sell Insurance ensures the remaining business partners or shareholders have the funds to buy out a deceased, disabled or critically ill key employee’s shares or ownership interests should they need to exit the business.
Cover Types Available
Total and Permanent Disability
Who should have a keyman insurance policy?
You may want to consider cover if your business has
If a business has outstanding loans, they want to consider protecting themselves against a loan suddenly being called in if a guarantor is no longer able to continue working in the business.
Reliance on key staff
If you are a business which relies on the skills, knowledge and experience of a small number of key staff who are fundamental to the business, you may want to consider protecting your business if one of these people were suddenly unable to work in the business.
Sole Traders or Partnerships who have substantial business valuations may also want to consider a keyman policy.
Benefits of Keyman Insurance
Provides funds to cover replacement employees’ salary or can help fund the search or recruitment for a new employee.
Help cover any losses that result in the key person within the business leaving
Provide funds to the business to cover the cost of exiting partners shares in the business
Multiple types of cover available
Helps cover cost of outstanding business loans
Which employees should be covered?
Generally employees who are owners, directors or senior executives, or those employees whose skills, knowledge and experience are invaluable to a company should be covered.
How much cover is required?
The amount of cover required will depend on a number of factors:
The purpose of the cover
The amount of funds that would be required to ensure that the key person’s exit does not leave the business in a worse financial situation
Any taxation consequences based on the particular structure you set up.
How is a keyman insurance policy structured?
Generally a keyman policy is owned by the business, with the key person listed as the insured and the business listed as the beneficiary. This means that the directors/owners of the business would also administer the policy on behalf of the business.