Keyman Insurance in a Recession

Most companies, whether they are small or large, are struggling right now. Obtaining credit from banks is becoming harder by the day. Sales are down and costs are rising. What can the company do to survive? Put simply, companies have to cut costs which often means staff too. More and more redundancies are announced each day but it is extremely unlikely that any of these redundancies are key persons.

There can be a problem with this approach though. Often enough companies also try to cut as many costs as possible including insurance premiums such as keyman insurance. This can be dangerous to the company in a recession though. If the company has already made some staff redundant and kept on essential staff, but one or more of those are keyman category and suffer death or are diagnosed with a critical illness, where does this leave the company? If the company has had the sense to have keyman insurance in place then at least the insurance policy proceeds will provide the company with some funding to carry on trading and find a suitable replacement. If, however, no keyman insurance is in place then the company faces a very realistic possibility of closure.

A keyman or key person is someone within the company who adds real value to its existence. These key people often have the most contacts, sell the most, and are passionate about the company's future. Without them the company might not be. Every company or business will have someone who is key to its continued success but without them the company or business would not survive. Surely these people are worth insuring? There is an argument that these people should be insured now, in a recession, more than any other time simply because they are the people who will get the company through the recession and ensure continued success whilst competitors fall by the wayside.

To sum up, Keyman Insurance has more relevancy now than ever before. Think about those people in your company who make it what it is and will continue to be.

Martin Cavana writes for The Business Protection Company who specialize in all types of Business Protection Insurance within the UK. The company offers advice and guidance for Partnership Protection, Shareholder Protection, Keyman insurance, Sole Trader insurance, Business Loan Protection and Executive Income Protection.

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