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How clients can safeguard their business success

2nd May 2024
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In most businesses there are certain individuals who hold the key to driving growth and revenue. However, when one of these key people is suddenly incapacitated due to unforeseen circumstances, the repercussions can be severe—potentially leading to lost opportunities and revenue downturns. This is where key person insurance proves its worth, offering essential cover to mitigate such risks.

How clients can safeguard their business success | Davenport Thomas | Padlock Symbol in the Room
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An illustrative case study 

Consider the case of Joe Jones, a top-performing sales executive and frontline ambassador at XYZ Corporation. Joe’s expertise and dedication were invaluable to the company's success. Yet, when Joe suffered a serious injury in a car accident, XYZ Corporation faced a daunting challenge. With their primary revenue generator sidelined, the company risked disruption to its operations and financial stability.

Fortunately, the business had invested in key person insurance, tailored to protect against the loss of revenue resulting from the incapacitation of key personnel. This foresight proved invaluable. The insurance provided financial compensation, allowing the company to weather the storm with minimal disruption. It covered recruiting costs to find a replacement, as well as training and induction costs; preserving relationships with clients and stakeholders, and ensuring business continuity.

The benefits of key person insurance

Financial protection – providing compensation to help offset the loss of revenue and cover recruiting costs, ensuring liquidity

Business continuity – helping to maintain operations and relationships, preserving trust and market competitiveness

Risk management – to help avoid risks associated with relying on certain individuals for business success

Recruitment and retention – offering key person insurance can enhance recruitment and retention by demonstrating a commitment to protecting employees' interests and financial security

Are you speaking to your clients about protecting their businesses?

As well as discussing key person insurance, you should also speak to any appropriate clients annually about shareholder protection (read our article here) and get cover in place as early as possible as premiums are likely to increase with age.

Roebuck is an appointed representative of Davenport Thomas and was set up to help provide accountants with a solution to their mortgage and protection advice requirements. For a discussion about how we can help, you can book directly into our diary here, email us or call us.

 

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Calendly - David Fear

David’s tel number: 0208 8192407

David’s email:  [email protected]

 

Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.