"I own my own business and often have to travel for work. I drove down to Kent last week and the weather was just awful – lashing rain and spray so bad that I couldn't see a thing, especially with all those articulated lorries on the road. Just as I was getting near to the M25, the M1 ground to a standstill. For the next six miles it was gridlock, adding at least an hour to my journey.
"The delay had been caused by a bad accident – a lorry and two cars all looked to be in a very bad way. It occurred to me that it could have so easily been me in that accident, especially in these terrible driving conditions. I thought about the consequences of my being involved in a fatal accident. My life insurance is all present and correct and my Will was recently renewed, so my family would be able to manage financially.
"But what about my business? It's only a small company with two directors and seven employees, we also have an overdraft and a number of different types of insurance, all the essentials like public liability and professional indemnity, and the cars and stock are also covered. I even made sure we had legal protection insurance.
"I still felt like there was something missing. It occurred to me, what if it had been Jason, our star salesman, who had been in that accident. It's thanks to him that we've done so well lately, and he's been very loyal by staying with us for six years. Or what if it had been my co-director who also has a 50% share in the business with me. How would we cope without him and his creative input?
"I could picture it clearly – we'd have real problems coping without either of them. Pretty soon we would be losing money and the Bank would be calling to ask about the Director's guarantee on the overdraft. I'd have to buy the shares because I wouldn't want a new person to co-own the company, and then I'd need to take on someone else with all his skills to take on his role – that would be nigh on impossible. Attracting the top candidates is an expensive business, and it would cost me a lot of time too when I would need to be concentrating on keeping the business afloat.
"I started to panic – just what would I do if something bad happened to one of my key staff?"
Does this story make you think? In the UK , 95.2% of businesses have less than 10 employees and these are the people most at risk from experiencing the sudden loss through illness or death of a key person. The facts speak for themselves - 1 in 5 men and 1 in 6 women will suffer a critical illness before the usual retirement age, and that's not counting the chances of having an accident. Not insuring your key people is taking an unnecessary chance on your business.
For some reason, Keyman insurance is just not very popular. We don't know if it's because financial advisers forget to mention it, or because people are not convinced that it's a worthwhile type of insurance. The majority of Britain 's 4.1 million small businesses should have it, but only a tiny proportion do. This is why:
Keyman insurance:
provides income to the small business while the key person is unable to attend work, helping to compensate for the extra income the person usually brings in

About The Author

Michael Challiner has 15 years experience in financial services marketing at senior level. Michael now works as the editor of Express Life Insurance - http://www.express-life-insurance.co.uk.
michael@andromedawebs.co.uk