To say we’ve been living through a period of uncertainty is an understatement. Over the past year businesses have had to confront temporary loss of earnings, a switch to working from home, a furloughed workforce and the management of self-isolation or illness.
Navigating these choppy waters has been a huge challenge, Harpur Wealth Management’s team of financial advisors have been supporting business clients through it. One of the most difficult adjustments we’ve seen businesses having to make is the replacement of key personnel. In this blog we look at the ways key man insurance can protect your business in uncertain times.
Managing the Loss of Valued Employees
COVID-19 is no respecter of business, and there are few companies that haven’t experienced lengthy absences, or loss, as a result of it. We are hopefully turning the corner, thanks to the NHS vaccine rollout, but we should be wary of considering the pandemic over.
Managing long absences or loss take an emotional toll, but they can also affect sales and profits adversely. Key man insurance is a form of business protection insurance that ensures stable continuity in the event of losing someone who is key to your operations. Which is exactly what your shareholders want to see.
The Benefits of Key Man Insurance to Your Business
Replacing someone with specialist knowledge, skills and experience is a costly and time-consuming process. Key man insurance exists to give you the breathing space to manage their replacement effectively, without disadvantaging your business in the process. There are 3 important benefits to having this particular protection in place:
- Keeping Staff Stress-Free. Losing a valued colleague is stressful enough, but having to try and cover their workload can feel overwhelming. Key man insurance provides employees with the reassurance of long-term business continuity, which can serve to alleviate short-term adjustments.
- Recruitment Costs Covered. If you lose a key person to illness or death, key man insurance will cover the cost of either recruiting a similarly qualified replacement, or training an existing employee to replace them. This means that businesses can take the time to make decisions about the best way forward without worrying about a loss of profits.
- Identifying Key Employees. Knowing who your key employees are is good business practice. Acknowledging their importance to your operations by covering them as key people is good for morale. Feeling undervalued is a key driver to valued employees looking elsewhere for work; key man insurance demonstrates your appreciation.
Business Financial Advice From Harpur Wealth
At Harpur Wealth we understand the issues around protecting the assets in your business, because it’s something we have to think about, too. Our task is to help businesses by creating long term strategies to help them weather the kind of ‘shocks to the system’ we’ve experienced this past year. Key man insurance is one of the ways we can help, but we can also work with you to create a bespoke business protection plan to cover your company going forward.