If you are involved in a business with more than one business owner, Key Man Insurance is also important as part of executing a ‘Buy/Sell Agreement’ which is further explained below.
For Individual business owners, Key Man Insurance is designed to provide your business a lump sum benefit to cover the following:
- To employ a replacement so your business can continue in the event of a major disability or trauma.
- This will enable your business to continue to operate should an unforeseen event occur.
For Multiple business owners, Key Man Insurance is designed to provide your business a lump sum benefit to cover the following:
- If a business owner passes away or suffers a permanent disability, your company (subject to a Buy/Sell Agreement) will have sufficient capital to buy back the shares in your company from your business partner and the surviving spouse (in the event of a death).
- Without a Buy/Sell Agreement in place, you run the risk of your business partner’s spouse becoming a director/shareholder in your company.
- Provide a lump sum benefit in the event of a significant trauma to employ a replacement to your business partner so your business can continue to carry on its functions and maintain its profitability.
Key Man Insurance for clients is extremely important as highlighted above. We work closely with solicitors with the preparation of a Buy/Sell Agreement so your business can carry its normal functions should an unforeseen event occur to you or your business partners.