Many businesses rely on the business founder or owner for their success. With the Covid-19 pandemic having wreaked havoc the world over, businesses have been highly impacted, and the pandemic has shown that no one is immune to a life altering event.
Have you ever wondered what would happen to the business if one of the business owners were to become disabled or even worse, die suddenly? Liberty's Lead Specialist for Lifestyle Protector, Kresantha Pillay says now is an opportune time to shine a spotlight on the importance of business assurance cover.
Research recently conducted by Liberty shows that 67% of all new businesses start with one key individual, so it is difficult to separate the business from the person, or the person from the business.
"Key-person insurance cover is designed to protect the business against the loss of the unique contributions these individuals bring to the business. It is cover that would be owned by the business to cover its key people against death and temporary or permanent disability, and it would compensate the business for the loss of income while the company seeks out new talent to fill their shoes, she explains.
People are and always will be one of the most important assets a business can have, and typically the founder, or 'rainmaker' brings a wealth of knowledge, creativity, inspiration, skill-set that are vital to the continued growth of the business.
"However, most business owners don’t go at it all alone. Many have talented business partners who they rely on for daily operational input and maintaining those crucial client relationships in their own unique way. It could be that one key account holder, or an engineer who they can't do without."
Typically, business discussions are about new revenue streams and profitability. Pillay says added to that should be how to overcome potential loss, should key people be impacted by life changing events.
"Through an accredited Financial Adviser, it is important to identify these people and to work on tailored keyperson cover to protect the business against the potential loss of a key person. Liberty's key person cover is part of its Lifestyle Protector solution," adds Pillay. The loss of vital individuals could severely hinder or even cripple a growing business.
This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.
Liberty Group Limited is the licensed insurer of the Lifestyle Protector Range and an Authorised Financial Services Provider (no. 2409). Terms and Conditions, risks and limitations apply.