Keyman And Disability Insurance. Be Sure To Plan For The Upcoming Year.


Everyone in your business is vital to its success, but there are usually some individuals who stand out as being particularly indispensable. What would happen if that linchpin of the team got very sick and went on permanent disability or, worse yet passed away?  Without them and their expertise, not only could you face serious business interruptions - it may even be enough to sink the company! 

FACTOID: Studies have revealed that 72% of SME businesses stopped operating within 5 years of the business founder's passing.

The permanent disability or death of a key staff member, director, or consultant could have major ramifications for your business, including but not limited to:

  • Loss of industry knowledge, management expertise or business contacts
  • Loss of previously established positive connections with suppliers, banks or distributors
  • If the key person provided personal guarantees on these loans, the bank loans may be called in.
  • Bank withdrawal or reduction of credit facilities due to uncertainty regarding the future viability of your company
  • The added expense of finding a replacement who is competent and experienced

Keyman and Disability insurance: What is it?

Keyman and Disability Insurance is the perfect safeguard for businesses looking to protect against the financial hit of an unexpected loss. Whether it's a key employee or director, with this insurance your business will be covered. Oftentimes, this coverage is overlooked, when in fact it should be considered essential for every business.

Keyman and Disability insurance: How it works?

Having a Keyman and Disability or Specified Illness insurance policy in place can be an invaluable investment for your company. In the unfortunate event of the passing or specific sickness of key personnel, companies will receive a lump sum payment that can help provide essential financial aid to their business during challenging times. The company expenses the premiums and experience has shown that this investment in “worst case scenario” coverage provides for stable transition planning and better long-term viability. 

The cost of this coverage is usually determined by taking into account the following variables, including:

  • Value of loans that the principal person personally guarantees
  • Value of loans that the company's main employee may have to repay to their estate
  • Estimated loss of revenue the company would experience as a result of the key individual's absence 
  • …to name a few

The New Year is a time for fresh starts and new beginnings. But it's also a time to think about your business's long-term safety and security. Understanding Keyman and Disability insurance is a key step in that process. With this type of life insurance, you can safeguard your business from the devastating impact of an employee's death or disability. Be sure to speak with one of our experienced commercial insurance team members here at Massey, Clark and Fischer to discuss Keyman and Disability insurance and how it can provide invaluable security and peace-of-mind!


Disclaimer: The above description provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.

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