Beyond Benefits

November 2022

The key to protecting your business against the worst: Key Person Insurance

Executives and shareholders are often on top of a million things at once to successfully run their business – so it’s no surprise that some things can get glossed over and/or forgotten. One of the most overlooked, but most crucial areas in business is planning for the catastrophic risk of death or disability amongst key executives or shareholders. These events can have a severe negative impact on profitability, or in many cases, the survival of your business.

 The best way to equip your business against such risks is Key Person Insurance. Corporately owned and funded Key Person Insurance offers phenomenal protection for your business, while creating opportunities to provide additional value to your executive, management, and ownership team. The investment required to adequately hedge against these risks with insurance is miniscule when compared to the magnitude of the financial risks at play. 

For Key Executives, examples of these risks to the business are:

  • Difficulty and high cost of replacing professional skills
  • Loss of client relationships/sales performance
  • Operational impacts from absent key employees

For Equity owners, examples of these risks are:

  • The high cost of purchasing the deceased shareholders shares as required in a Buy/Sell agreement
  • The impact of unqualified heirs managing the company
  • The high cost of replacing an owner’s professional skills without the ability to utilize equity
  • The high increased risk of litigation between Shareholders and Estates/Heirs

Stay prepared with Kearns Edgewater Financial Services 

The loss of a key executive person or shareholder at a company is difficult to even think about, much less plan for. The good news: we’re here to help you navigate through the tough stuff. 

Humi has recently partnered with the team at Kearns Edgewater Financial Services Inc. (KEFSI) to provide our clients with access to the advice and solutions needed to succeed through unexpected, difficult times. Insurance solutions are the most cost-effective way to address these risks, and the process-oriented approach from KEFSI will give you invaluable peace of mind. They’ll ask you the right questions to assess your situation and devise a solution that best suits your circumstances.

For example, have you thought about…

  • Working with your business partner’s children or spouse if they were to inherit shares?
  • Meeting important customer commitments if a Key Executive stopped working today without notice, due to disability or death?

If these questions haven’t already been evaluated and planned for, we strongly recommend you complete a risk assessment and fact find with our partners at KEFSI.

Want to speak with someone directly? 

We’re here for you. Reach out to us at support@humi.ca for additional assistance.

Beyond Benefits
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