15th January 2016
Four steps to identifying your key person
Tagged: Key Person Insurance
How would your business cope if one of its owners or key people died or suffered a critical illness? Follow these steps to identify who they might be.
Step 1
Who is responsible for the four key business functions?
- Leadership
- Production of service or goods
- Financial control
- Sales and marketing
Step 2
Are they a key person within the business functions?
A key person could be one or a number of people, such as:
- Chairman
- CEO
- Managing Director
- Marketing Manager
- IT Specialist
- Sales Director
Step 3
Identify the financial consequences.
Could their death or inability to work lead to a financial consequence for the company:
- Lower profits whilst the business adjusts
- An interruption to the day-to-day running of the business
- Loss of clients from failed contracts
- The need to recruit a replacement
- Your clients or suppliers losing some confidence in your business
- The inability to raise capital or attract new investment.
Step 4
What next?
Once you have identified your key person(s) then it’s time to talk to a financial expert, as in many cases your business needs will be unique and there isn’t always a set formula for understanding the cover required.
