Can you think of a business that has more risk associated with losing a key employee than a business in the trade industry?
I can’t.
Most key employees in the trade industry are directly linked to the financial stability of that business.
Whether it’s the owner of the business or a plumber that brings in lots of revenue, these individuals and their labor are fundamental to the survival of your business.
Tragically, no one expects a sudden death, disability, or accident, so many companies are caught unaware and unprotected.
So, what is Keyman insurance, and how can it help protect your business?
Keyman insurance provides financial assistance to the business in the event a key employee dies or becomes disabled.
It typically pays for things like:
- lost revenue
- training for a replacement
- paying off loans
- collateral for SBA loans
- buying back stock
- salary continuation to a spouse
Some important facts to know about Keyman insurance:
- You can purchase term or whole-life Keyman insurance.
- There will be no tax implications for the employee who is insured if the company is the sole owner and beneficiary.
- The amount of coverage you need on each key person in your company is dependent on the impact their loss would have on the company.
- This policy provides funding to a business if one of its key employees becomes unable to work due to a disability.
- It does not cover the loss of a key person who decides to leave your company due to retirement or to take a job with another company.
Whether you’re a one-man band, medium-sized plumbing company, or large general contractor, the financial burden of a key employee passing away or becoming disabled can be disastrous.
Reach out or contact your agent if you’re not positive the proper coverage is in place.