Business Continuation Plans
Key employee insurance
A business can lose a key executive to death just as quickly and unexpectedly as to termination of employment, and the blow can be a devastating one.
The success or failure of a small or medium–business can hinge on the abilities of just a few key executives, usually owners and their key management employees. The removal of one of these key players through death can quickly turn business success to business failure, unless the business has taken steps to offset the economic loss that will result from the death of a key executive
A well–managed company wouldn’t think of not insuring its property against loss, and yet life insurance on key executives may be a far more vital need. Consider that:
- Statistics tell us that the odds of the death of a key executive are far greater than the odds of a fire loss.
- Death is always a complete loss while property may just be partially lost.
- Replaced property is likely to be newer and more efficient; a replaced key executive may not be.
This policy pays the salaries of support people in case the principal is disabled and cannot keep the business going for a period of time. A nurse working in a physician’s office could have her salary continued if the physician is disabled for a period of time.
Plan today for the future of your business and family. Imagine what would happen if your business suddenly had to continue without you, a partner or key employee. Death, disability or retirement of a key executive can create a succession crisis.
- If you died, would your family be able to successfully operate the business?
- If your successors had the opportunity to buy the business, where would they get the money?
- If a partner were no longer there, could you afford to buy his or her share?
With a carefully constructed business succession plan, you can create a rock solid foundation for the future of your business—and the people who depend on it. Working together with your accountant, attorney and other advisors, we can help you pull together the necessary elements of a successful succession plan.