When a company’s turnover drops sharply or disappears entirely, its fixed expenses and loan payments frequently continue unabated. That means the company is soon required to dip into its reserves. This does not just affect profitability; it can also threaten the business’s continued existence.
Reduce the risk with keyman insurance
Though loss of turnover is not insurable in and of itself, it is always possible to obtain coverage for a business manager’s incapacity due to illness, injury or death. A company’s business manager can be vital to its continuity. Absence of the business manager will often affect a company’s turnover greatly. So-called keyman insurance can protect companies against such risks. The keyman insurance will cover the fixed costs and can also help pay for a replacement if desired. In this way the business’s continuity remains assured.
Benefits of keyman insurance
Keyman insurance is considered a deductible business expense and can provide monthly payments for as long as the business manager is unfit to resume work. It is also possible to limit the keyman insurance’s indemnity period to a predetermined length of time, such as the repayment period for a specific loan. What is covered by the policy is fully customisable.
The current coronavirus crisis has made it clear that reductions in turnover can have far-reaching consequences. Do you require further information about keyman insurance? Please contact your account manager or one of our experts at email@example.com.
We base our advice on current legislation, interpretations and legal doctrine. This does not prevent the administration from being able to challenge it or to change existing interpretations.