Editing Secure Your Business With Key Person Insurance

Key person insurance is an insurance policy which guards a business against financial loss in the event that a specific individual, who plays a pivotal role in ensuring the financial success of the business, were to become unable to fulfil their normal role. For many businesses, there is a particular individual who has some form of skill or knowledge base which transcends that of their co-workers. In some businesses, the role of this individual may be covered by someone else (or a team) if the person is unable to fulfil their role. However some business rely so heavily on the skillset of one person that if this individual were to become incapacitated, for any significant period of time, the business would sustain substantial financial damage.

In order to protect a business from such devastation Compendium [http://www.cig.co.za/key-person-insurance.aspx offers key person insurance] policies. These policies offer increased financial security to businesses who might otherwise find it difficult to pursue normal business practices in the event that a single individual were to be unable to play their normal role in the company. Key person insurance is designed to cover any person who is directly associated with the company who's reduced capacity to perform could seriously negatively impact the business.

In the event that the specified person is unable to perform, a key person insurance policy can pay out in several ways. The first is through the temporary replacement of the insured individual. If they are unable to perform, a temporary hire may be made to cover the loss. This would also include any training needed to ensure the temporary staff member is able to perform the duties of the incapacitated. The policy may also pay out if profits are reduced because of the absence of the insured person. The insurance policy may also protect the interest of the shareholders or partners. Finally, a key person insurance policy will insure any individual, within a business, who is involved in guaranteeing business loans.

There are many businesses that rely on the skills and expertise of a select few individuals. If your business is one with an individual who is vital to the financial success of the company, then a [http://www.cig.co.za/key-person-insurance.aspx key person insurance] policy is necessary to ensure financial stability in the event that the insured may not be able to perform as normal.