Business Assurance
Key Person Cover
Key person insurance is a type of life insurance policy that provides a death benefit to a business if it's owner or other significant employee passess away.
Key person insurance may make sense in many circumstances:
HOW MUCH COVERAGE SHOULD I BUY?
There's no set formula for deciding the monetary value of your key person insurance, says the III. You may want to start by considering the financial effects a key employee's death would have on your company.
For instance, if you're a sole proprietor buying key person insurance on yourself, you may want enough coverage to help your heirs close your business and pay off any company debts. If you own a larger company and are insuring a key employee, you may need enough coverage to replace that person's sales income, for example, or to provide a financial cushion while you search for the employee's replacement.
WHO OWNS THE KEY PERSON POLICY AND WHO BENEFITS?
How your policy is structured may depend on your company's legal structure. Typically, the company pays premiums for the key person policy, and also owns it and is the beneficiary.
Buy & Sell Agreements
A buy and sell agreement is a legally binding contract that stipulates how a partner's share of a business may be reassigned if that partner dies or otherwise leaves the business. Most often, the buy and sell agreement stipulates that the available share be sold to the remaining partners or the partnership.
We work with a specialist attorneys to draft a custom buy and sell agreement for your small business.
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