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Financial Services - Business
Financial Services - Business
Keyman Protection
Whilst most businesses insure their premises and its contents, company vehicles and stock against fire, theft, accidental damage and consequential loss, many fail to insure their most valuable company assets namely their key personnel.
In the event that key people with a particular skill, knowledge or ability are unable to continue working for your company due to ill health or death, Keyman Protection can help off-set the financial difficulties sustained to the business by contributing towards temporary replacement cover, training or recruitment costs.
Keyman protection is a short term policy taken out on the life of key members of staff whose loss would have a negative impact on the profitability of the company.
In order that you may claim tax relief on the premiums paid for Keyman Protection, you will need to seek guidance from your local tax inspector. However, there are a number of guiding principles that the policy should fulfill known as the ŒAnderson Guidelines¹ which will help you determine if you are eligible for tax relief, namely:
- The policy should be short term in nature
- The insured should be an employee of the company who owns no more than 5% of the company¹s shares
- The aim of the policy should be to replace loss of company profits.
- If you are able to claim tax relief, in the event of a claim, any payment received may be taxed as a trading receipt.
Whilst Keyman Protection may not suit everybody, as a short term tax relieved policy, can you afford not to consider the consequences of not insuring key personnel? What would happen if:
A key member of staff or in the case of a sole trader, you were to fall ill?
If that key member of staff were to suffer long term illness? Or even worse were to die?
Would the future of your business or company hang in the balance between success and failure?
At Willis and Company (Financial Services) Limited, we can work with you to help you understand your business needs and create protection packages which are relevant to your particular business needs.
If you would like further information on Keyman Protection products, please contact the Willis Financial Services team on 028 9032 9042 or complete our enquiry form.