What consequence can your business face from the loss of a key employee?
As a business owner you try to protect your business against lost of physical assets, but what about lost of a key employee? Studies show the probability of losing a key employee is more likely than a loss due to fire or most other perils. It increases to 17 times at age 50, and to 23 times at age 55. Furthermore, about one out of three individuals dies during work life with consequential loss to his/her business.
In addition most other loss due to perils are temporary; locations can be rebuilt and office supplies can be repurchased. In contrast a new hire may need several months or sometimes years to be as productive as his/her predecessor. The deceased employee may also be impossible to replace.
How to determine a Key Employee?
Every corporation has at least one key executive or an employee who makes a substantial contribution to the operation, profitability and success of the business. Any individual that has critical intellectual information, sales relationships, bank relationships, product knowledge, and/or industry contacts that may adversely affect profits in the event of their absence, may be considered key.
Insuring a Key Employee
Although life insurance cannot ever fully replace the value of a key employee, it can indemnify the business for the financial setbacks that can occur. Life insurance can provide the business with needed funds to keep the business running, to assure creditors that their loans will be repaid, to assure customers that business will continue operations, to cover the special expenses of finding, hiring, and training a replacement.
Visit http://www.vintageinsservices.com/Loss_of_Key_Employee.html for more information on how Key Person Insurance may work for your company.