Key Person Insurance is an important part of business insurance. It provides protection in the event a business owner or key person within the business suffers from an illness or injury which prevents them from working,
Key Person Cover will pay a business an agreed monthly benefit for a set period to compensate for losses the business may incur, allowing the business time to recover and put in place appropriate measure to ensure it keeps running
How do you determine if you need Key Person Cover?
Look at your business and determine who is irreplaceable in the short-term. In many small to medium sized businesses, it is often one or two people who are the key revenue generators and if they are absent the business could cease to exist.
If you operate as a sole trader or the company employs just you, Key Person Cover can still be a very good alternative to mortgage and income protection.
How much Key Person Insurance do you need?
This is dependent on the business. You need to consider how much money the business would need to survive until it could replace the key person and enable the business to get back on track.
Some startling facts*:
- In 2008, it was estimated that 1880 business ceased operation, partly due to the owner or a key staff member not been able to work
- 4 out of 10 males and 6 our of 10 females are likely to be off work for 20-90 days due to an illness or accident before they reach 65
- 35% of people injured take longer than 3 months to return to work
To get further information on Key Person Insurance and advice on what would be most suited to your business, please call us on 412 6363 or email info@rsl.net.nz
• Facts from OnePath
