Sophie is the new landlady of a pub with her husband, Andrew, in the heart of Surrey. They employ around 10 full-time staff. She is looking for suitable business protection as the current one is due for renewal later in the summer. Sophie is looking for key man cover for herself and Andrew, but also for the manager as he has specific knowledge about running the pub. If Sophie or Andrew die, they would like to ensure the continuity of the business. What do you recommend?
Iain Henshall, Towry LawKeyperson cover is intended to protect a business from the loss of a key contributor to the business. This need is likely to be greatest for smaller businesses, which are heavily dependent on the expertise and experience of a smaller number of people. The amount of cover required should reflect the needs of the business, as the insurer will check this as part of the underwriting requirements. When determining the cover required, the following formula is often used: keyperson's remuneration/total payroll x profit x years for the business to recover. Sophie may, howev...
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