Memo to Myself - I Need Keyman Insurance

Last calendar month I had to drive down to London. I don't like drive at the best of modern times but the rain, spray and heavy traffic on the M1 made statuses difficult. Radio 2 kept me company and the warmer kept me warm. Then I hit that waiting line - six miles solid and I was soon an hr behind schedule.

They were still clearing up the accident when I got there. It was nasty. A lorry and what was left of two cars. Made me think, after all that could have got been me. Yep, my life insurance is up to day of the calendar month and my Volition was renewed only last month. The household would be well cared for and the mortgage repaid. Had I missed anything?

The business. What would go on to that? We have got two directors, 7 employees, an overdraft and tons of insurance. Populace Liability, professional indemnity, vehicles and stock are all insured. We even have got legal protection insurance. Had I missed anything? I got to thinking.

Thank goodness it wasn't George in that accident. A great cat and he's been with us five years. He's our top salesman. There again what if it had been my co-director World Health Organization also have 50% of the business? What would be the reverberations on the business?

Sales down, net income down, bank phoning all too politely to inquire about the Directors warrant on the overdraft. Then I'd have got to seek and purchase his shares. I wouldn't desire person else to get clasp of those. At some stage I'd have got to enroll person of his quality to go on the company going forward - that wouldn't be easy! And recruiting top people doesn't come up cheap. That's more than clip and more money. The personal problems …… the reverberations …….. the extra work ……… the extra emphasis ……..

Oh heck, I don't desire to believe about it all. Quickly, electric switch over to Radio 1.

Does all this ring dismay bells with you? 95.2% of United Kingdom businesses use less than 10 people and these are precisely the arrangements most at hazard from the impact of terrible unwellness or death of a cardinal person. The hazards of a cardinal individual being stuck down with a long term unwellness or death are real. 1 in 5 work force endure a critical unwellness before their normal retirement age. Then there's the M1. The fact that it hasn't happened so far might just intend your business have just been lucky.

Now to those actuarial boffins in insurance companies, hazard and fortune are impudent sides of the same coin. And they can supply insurance screen for most risks. After all they too desire to increase sales. But they're scratching their caputs about Keyman Insurance. Most of Britain's 4.1million small businesses should have got it but few do. What can it do? It can be structured to:

Provide an income watercourse to the company whilst the cardinal individual is incapacitated (compensation for the lost part from the Keyman)

Provide a lump sum of money to the business in the event of death (pay off the overdraft or simply support cash flow?)

Provide money for remaining shareholders to purchase the shares from the original shareholder or their estate

You'll need to speak to a Financial Adviser about these issues but they are all insurable. Can your business afford to take a hazard it doesn't need to?

Memo to myself – get Keyman Insurance!