With all that the world has gone through in the past year, giving your business a stable and secure financial future is probably high on your list! With that in mind, it’s important to consider certain risks your business may face and prepare for those potential circumstances. When an employee crucial to the function of your business becomes disabled, will day-to-day activity continue as usual or are disorder and uncertainty inevitable? Would you be able to maintain the same level of business expectations and revenue stream without this person’s input? How do you plan on covering for these financial losses when it comes time for recovery from a disability or finding a temporary replacement while they get better? If this seems overwhelming, we get it! That’s exactly why Nowell Agency provides Key Person Disability Insurance that provides stability and peace of mind in difficult times – now that’s priceless!
Who Qualifies for Key Person Disability Insurance?
While there is no specific rule in the insurance industry on who is considered a key person for insurance, it is generally accepted that a “key person” in any company refers to an individual with extraordinary skills who is necessary for the function and success of the business. This could be someone with high-level executive leadership expertise that cannot easily be replaced by other employees or someone who is solely responsible for day-to-day operations. Typically these individuals have special knowledge related to their industry which allows them not only greater insight into their own field, but also provides unique perspectives on how different fields interact together.
2021 Requirements for Key Person Disability Insurance
All insurance plans for key person disability coverage are written for the specific employee designated as the “key person.” The business must show that the revenue and operations of the company would be greatly impacted by the loss of the key employee and that their salary reflects their level of importance to the company. The best key person disability insurance providers, like the Nowell Agency, will work with your business to create a customized key person disability policy that covers your specific needs.
What Does Key Person Disability Insurance Cover in 2021?
Not to be confused with Key Person Life Insurance which covers for the death of a person integral to the business, Key Person Disability Insurance policies provide short-term financial benefits to a company if the sudden onset of an illness, injury, or accident prevents key employees from fulfilling their role. It’s also different from personal disability insurance because key person disability insurance pays benefits to the employer rather than the disabled individual. Most key person disability plans cover the costs of recruiting for a replacement employee (hiring a recruiter and advertising), training the replacement employee, and recovering losses incurred (staffing coverage costs, revenue loss, etc.).
Who Needs Key Person Disability Coverage?
All businesses can benefit from having a solid plan in place for the temporary loss of a key employee or business owner. Yet certain industries that have employees with highly specialized skill sets have more reason to get key person disability coverage, as finding a short-term replacement is exceedingly difficult. If you have employees or business circumstances as outlined following, you will want to consider a key person disability policy:
Businesses with specific high revenue-producing clients
Companies with narrow profit margins that rely on a small number of key employees
Employees with unique and highly specialized training
Employees who would be extremely difficult, time-consuming, or expensive to replace such as vital sales employees, CFOs, CEOs, decision makers and those with critical commercial impact
Employees with direct and personal connections to vital business components (such as trade connections or those who represent sports stars, actors, etc.)
A key employee with consistent health issues
If this sounds like coverage that could benefit your business, contact Nowell Agency today! With just a call or click, our 30+ years of expertise in the insurance industry starts working to your advantage. We have customized key person disability insurance plans and our qualified agents are ready to help! Get the peace of mind you deserve!
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FROM OUR CLIENTS
The Nowell Agency has been my primary agent for many years and they are attentive, well-staffed, and easy to talk to. Their agency has helped me through state to state moves and career change and kept my assets covered.
My very first insurance experience was when I bought my first house and I called the Nowell agency for a quote. I had no idea what I needed or how much and they were so very kind and knowledgeable and explained everything to me in detail which I so much appreciated. That has been 4 years ago and im still a customer never plan to leave.
I have been very pleased with the quick and professional service by the Nowell agency. My agent was very efficient at locating a policy that met my needs and budget. Thank you to Kristy and the Nowell agency for providing me with fantastic customer service. I highly recommend this agency. You will not be disappointed.
The reality of doing business is that your organization is going to face risks. The dangers that threaten your livelihood can result in your business being held accountable for legal and financial responsibilities that can quickly become overwhelming. As a result, many business owners purchase insurance policies for protection against the fallout of such losses. […]