A small to medium-sized business may not think much about using specialized business insurance. However, a key question to ask is whether or not a company can survive if an incident occurs.
Most companies have coverage for main risks, such as fires, theft, and liability claims. If something happened to the head manager or the owner, could the business continue on? In some cases, the answer to that isn’t as clear.
What Is Key Person Insurance?
Key person insurance is a form of business insurance taken out by the company on one or more individuals. This may be the owner or other valuable individuals to the company that are not easily replaced.
Do you have employees whose absences would impact the business’s ability to function?
What Should You Know About Key Person Insurance?
Even small businesses need to consider this type of business insurance. It can offer a number of benefits. Here’s what you need to know.
- Often, this type of insurance provides between $250,000 and $1 million of coverage should a key person die. It works much like a life insurance policy but benefits only the company.
- The company selects how to use the insurance payout should the employee die. This may include paying off debts or using it to offset expenses while looking for a placement.
- If the business cannot go on, these funds can help to pay off investors or pay severance pay to employees losing their jobs.
- The business pays the premium for this insurance. It does not benefit the employee covered in any way.
It’s important to consider this coverage for those who are business founders, executives of the business, owners, or other important individuals.
As a business owner, investing in this type of coverage for yourself can be valuable. If you hope that your company will go on after your death, these funds can make sure that is possible. If you do not have this type of business insurance in place, purchasing a policy is generally easy to do. Premiums tend to be affordable especially when you consider the protection they offer.
Insurance Agent2000 can help you get the Concord key person insurance that you need. Get in touch with us at (925) 827-0510 for more information.