Key person insurance, which is also commonly referred to as key man insurance, is a type of insurance that can go a long way toward protecting a business. In some situations, it is possible that an employee is the cornerstone of a business and the loss of that employee could cause the business to go under. In these situations, key person insurance can be extremely beneficial in protecting the business.
What is Key Person Insurance?
Key person insurance can be purchased by a company. They can purchase this policy on a critical employee or an owner. It can help to cover expenses if the insured person passes away or becomes disabled and is unable to work. This helps to protect the company in the event of the loss of these people.
What Key Person Insurance Covers
Key person insurance helps to cover the expenses that come along with the loss of a key person. It can help to both cover lost profits that are caused by the person’s loss or the expenses associated with hiring a replacement. This can go a long way toward helping a company to survive when they have lost a key person to their business’s operations.
Circumstances in Which Key Person Insurance Can be Beneficial
There are several situations in which key person insurance can help to protect a business. In some circumstances, a business is a partnership. In these partnerships, it is possible that each partner wants the capacity to buy out the other partner’s shares if they pass away unexpectedly. These situations can make key person insurance particularly beneficial. Other circumstances in which key person insurance can be helpful is when the loss of an employee could potentially end the business.
At Insurance Unlimited, we strive to provide you with the insurance policies that will protect your business. Key person insurance can prevent a business from ending due to the loss of a critical employee. To learn more about our key person insurance policies, contact us at Insurance Unlimited in Bozeman today!