Not many professional business owners understand the benefits that having a key person insurance policy in place at their enterprise could provide.
You may own a business yourself or be a key decision maker in the company. If you are then you’ll know precisely how important people are to the success of your organisation. Having fewer people and working to tighter deadlines with smaller budgets means serious growth can be as much down to the commitment and effort of your team as much as the products or services you offer.
So much so that losing one of your most important workers doesn’t really bear thinking about, does it?
Key person insurance in the workplace
A huge number of businesses across the country though have failed to plan for such an eventuality by failing to invest in key person insurance and other policies, which could lead to potentially difficult situations for businesses should an essential member of their team fall ill for a long period during a critical time.
An online study conducted between 21st – 30th August 2017 using YouGov data of a sample size of 732 senior figures at company’s classed as SMEs found that only 26% have invested in insurance to cover key people throughout their business. Interestingly, 57% of SMEs that have less than 50 employees (and are aware that key persons insurance exists) simply don’t think it’s important enough to invest in.
The survey also indicated that 51% of SMEs say that no one had discussed business protection policies with them or recommended they invest in one. This is despite 30% of all those firms surveyed admitting they have lost a senior staff member or key employee for three months or more due to them suffering from a critical illness.
Key person insurance offers professional cover in tough times
Small businesses seem to believe it’s more important for them to insure their stock than the decision makers who help to grow their business.
With approximately three-quarters of SMEs not having the benefits of a key person policy for the loss of their key employees and decision makers, a lot of them sadly will only find out the advantages of having one when it’s too late.
It can be incredibly tough to find somebody with the specific skills and relationships your key personnel bring with them, and can be more expensive in the long-run as you cover both your employee’s and replacement’s wages.
Having the right key persons policy in place can help act as a financial safety net in those situations where businesses lose key members of staff to a critical illness, softening the blow until they’re ready to return.
Find out more about how key person policies can benefit your business and safeguard its growth by speaking to an Oportfolio specialist today.
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