Utilising key person insurance
In most circumstances, a business can be very reliant on key people. Much of the income might rely on the skills of a group of employees, such as a top account manager, technical specialist or salesperson. So, if these people became seriously ill or injured, it could have a considerable impact. Insurance can protect a business from this potential risk.
Key person insurance offers a term life insurance policy on the life of a key employee so that if something happens to them, the business will receive a lump sum to help it cope until a replacement is found. If you, as the business owner, are key to your business, it is also worth considering disability insurance for yourself so the business will still have an income if you are unable to work. You may also want to put critical illness insurance in place, which will give the business a lump sum if you are diagnosed with a critical illness.