Small businesses, because they have a limited number of employees, frequently have what are called "key employees” who are critical to the business. They may be a "key employee" because they manage a critical process within the business, they are responsible for a large percentage of the company’s revenue, or the customers and suppliers know and trust them. Often, the key employee is the founder or executives that are vital to the success of the business.
The loss by the death or disability of a “key employee” can be financially crippling to a business. Insurance policies on the life or injury of a key employee protect the business against losses that occur because of the person's death or disability. A policy on an owner can also provide the surviving partners or owners with the money to buy the deceased partner's stake from their estate.
If a “key employee” is lost as a result of death or disability, it may take you two or three months to replace them. Key employee insurance would cover the difference in the revenue produced until the person can return to the job or is replaced. Replacing “key employees”, and fully training their replacement, can be costly and time consuming, so if you have a “key employee” you may want to protect the financial solvency of the business that your worked so hard to build. For more information, please contact us.
