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keyman insurance: protecting your business against loss of turnover

Risk Management
08 May 2020

by Willem De Bock and Stijn Moreau

Keyman insurance: protecting your business against loss of turnover

The coronavirus epidemic is seriously affecting the turnover of many companies and sole traders. Unfortunately, there is no insurance coverage available to compensate for such loss at this time. As an entrepreneur, however, it is possible to insure yourself against loss of turnover due to your own absence as a business manager.

Keyman insurance: protecting your business against loss of turnover

When a company’s turnover drops sharply or disappears entirely, its fixed expenses and loan payments frequently continue unabated. That means the company is soon required to dip into its reserves. This does not just affect profitability; it can also threaten the business’s continued existence.

Reduce the risk with keyman insurance

Though loss of turnover is not insurable in and of itself, it is always possible to obtain coverage for a business manager’s incapacity due to illness, injury or death. A company’s business manager can be vital to its continuity. Absence of the business manager will often affect a company’s turnover greatly. So-called keyman insurance can protect companies against such risks. The keyman insurance will cover the fixed costs and can also help pay for a replacement if desired. In this way the business’s continuity remains assured.

Benefits of keyman insurance

Keyman insurance is considered a deductible business expense and can provide monthly payments for as long as the business manager is unfit to resume work. It is also possible to limit the keyman insurance’s indemnity period to a predetermined length of time, such as the repayment period for a specific loan. What is covered by the policy is fully customisable.

The current coronavirus crisis has made it clear that reductions in turnover can have far-reaching consequences. Do you require further information about keyman insurance? Please contact your account manager or one of our experts at corona@vdl.be.

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Willem De Bock

Business Manager Risk Management willem.debock@vdl.be

Stijn Moreau

Team Manager Risk Management stijn.moreau@vdl.be

Disclaimer
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.


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