Business Asset Protection Insurance
Business asset protection insurance is a type of key person insurance (formerly known as keyman insurance). The other type of key person insurance is business revenue protection insurance.
In the event of death or incapacity of a key person within a business, business asset protection insurance can be used to:
- Pay down any debt owed by the business.
- Remove any debt/guarantees provided by a key person to the business.
- Compensate the business for any expected loss of goodwill.
Who is a key person in a business?
Most businesses have one or more key persons whose skill, knowledge, experience and/or leadership are pivotal in generating revenue.
A key person may be one or more of a number of employees or business principals. They include:
- A revenue producer, such as a salesperson.
- The owner of key intellectual capital.
- The name behind the business (i.e. goodwill).
What does business asset protection insurance cover?
Business asset protection insuranceprovides cover for ‘capital purpose’ debt in the event that a business principal or key person dies or becomes disabled.
Business asset protection insurance can provide cash. This enables the business to:
- Repay debts to preserve its asset base.
- Protect the owner’s personal assets.
- Remove any personal guarantees that the business owners have provided.
- Free up cash-flow.
- Maintain the business’ credit standing.
- Compensate the business for any expected loss of goodwill.
" I contacted Humphrey Partners through a website enquiry seeking professional advice including a life insurance review. Chris took the time to fully understand my financial position, goals and needs to provide me with timely, relevant and easy to understand personal advice. This allowed me to make an informed decision about the types of insurance I really needed, my appropriate levels of cover and how to structure my cover to get the best value for my money."
Carmel White