Business Assurance

Business assurance puts safeguards in place to cover instances such as

  • Loan Accounts
  • Key Person
  • Buy and Sell Policies
  • Sinking Funds
  • Golden Handshakes

Heritage is able to assist you in any of the above requirements and give you professional advice so that the required product suits you and your company’’s requirements.

Keyman/ Contingent Liability

Key Man Insurance is a form of life insurance for a business. It is generally taken out by a business to compensate for financial losses that would arise from the death or permanent incapacity of the key individual(s) of the business and in turn ensure the continuity of the business. Dread Disease cover can also be added to cover but these disease are usually not of a permanent nature.
The policy does not cover actual losses, but compensates with a fixed monetary sum as specified on the policy.
There are generally two categories of loss for which Key Man Insurance can provide compensation, I have included a third but this is known as Contingent Liability:

  1. Protect losses related to a key person unable to work due to death or disability, therefore providing finance to the recruitment and training costs of a replacement.
  2. Protect profits: Covering possible loss of profits and the ongoing day to day running of the business that the loss of the key man could have caused.
  3. Protect any person involved in the business that has signed personal suretyship. The cover is arranged to equal the value of the guarantee given by the individual. This is known as Contingent Liability.

A Key Man can be anyone directly associated with the business whose loss can cause financial strain to the business

Buy and Sell Arrangement

A buy and sell policy is taken out on the life of each shareholder and the policies are then owned by the remaining shareholders in their proportionate shareholding. Premiums are paid by the owner based on their shareholding. In most cases the company pays the premium on the owner’s behalf. Based on their shareholdings the company either debits the owners loan accounts or deducts it from their salaries.
Life cover and disability is applied for in equal amounts. The disability should be own occupation disability, as if there is functional impairment the shareholder might still be able to work and the functional impairment condition triggers a sale of the shares.
On a death claim being paid the owners receive the pay-out in proportion to their shareholding and with these proceeds they then purchase the shares from the estate or in some cases a trust.

Heritage is able to assist in setting up a buy and sell agreement for these purposes.