It's common for businesses to insure their premises against damage and have a public liability policy in place. But why do businesses often fail to cover their key employees, the ones on whom your operations rely?
If you delve into your operations, you may find a surprising dependence on one individual's ability to work in order for your business to stay functioning. Regardless of this person's role, you should have a plan in case they move on, become incapacitated or pass away. This ensures your business can keep working, even without this individual's input.
Here are a few tips to help you dissect your business operations and identify the key individuals in your organisation that you simply can't do without.
Do you work in a specialised industry?
An obvious way to identify if you need key-person insurance or not is to consider the industry you work in. In a field like engineering or medicine, workers usually have particular qualities that could be difficult to replace if a vital employee moves on or can no longer fulfil their role. This may be because they have a skill set that is hard to replicate, possess a rare or high-level qualification or simply have more industry experience than other candidates in the job market.
Regardless, if you work in a specialised industry, it's likely one or more employees in your organisation will be essential to continuing your day-to-day operations.
Are your operations potentially dangerous?
In sectors such as construction or industrial risk assessment, the chances of an employee injuring themselves or worse while on the job is high. Even if these injuries are only temporary, any downtime to your business productivity can be costly, especially if this individual is the only person who can perform vital tasks. On top of this, all Australian employees are entitled to provisional workers compensation payments, which can impact smaller businesses negatively in a period of downtime.
Do you have any indispensable leaders in your organisation?
They say leadership comes from the top, and while there is no such thing as a leader with minimal impact on a business's day-to-day, there are likely certain individuals who are so valuable to an enterprise that their absence will be felt regardless of how long it's for.
CEOs, sales managers and project coordinators are just a few examples of individuals with a broad skill set, leadership responsibilities for workflow or people and specific experience within your business that would be sorely missed if they were unavailable to work for any period of time. Key person insurance is particularly important here if you don't have a concrete succession plan in place aligned with individuals who are ready to take on the additional responsibility.
The advantages of key-person insurance
Determining when and for whom you need key-person insurance is an excellent step forward for your organisation that's because it ensures operational continuity and cover for any costs incurred. The positives from choosing a tailored policy for key individuals include:
- Financial cover for costs incurred, including compensation payments, productivity downtime and recruitment and training costs.
- Covering for the loss of a key individual effectively ensures that other employees don't become disheartened by any disasters that are left behind as a result.
- Holding a key-person insurance policy offers peace-of-mind for potential investors that their money is in safer hands.
Who can provide comprehensive key-person insurance?
Trans-West Insurance offers personalised key person insurance packages designed to protect your business from any loss of income and associated costs with covering your operations. For more information, get in touch with our expert team today.