Optometry Wales - Understanding Risk & Insurance

Losing a Key Person – even for a short period of time – can have a big impact on your business. Many businesses don’t have the luxury of a ‘substitutes’ bench’ of reserve talent. Senior staff and business owners like yourselves are often involved in the day-to-day running of the business as well as performing your own role.

With Key Person Protection in place, if a Key Person in your business dies or is diagnosed with a critical illness, your business will be able to carry on its day-to-day activities with minimal financial disruption, and have enough funds in place to afford to ‘weather the storm’, and/or be able to spend the time to recruit a suitable replacement.

Example Scenario

Sally Wilson is a partner within a very enterprising Optometrists Business. Whilst her other 3 partners each have their own set of skills they bring to the business, Sally has been the one that has been at the forefront of driving the business forward over recent years with her background in marketing and sales. She is key to the business success over the next 10 years. Unfortunately, Sally suffers a stroke that leaves her severely paralysed and unable to return to work.

With key person protection in place the Business was paid out 5 times Sally’s gross remuneration package. The Business could now use this money to ‘headhunt’ a suitable replacement for Sally and finance other initiatives designed to minimise any fall in profits resulting from her disability.

Without key person protection, then in order to meet all the extra costs resulting from Sally’s disability, they may have to self-finance or incur extra debt. Either method would be likely to put additional strain on the company’s finances. The company may find it difficult to recover and could even be forced into liquidation.

Important Considerations

How much cover you require, and the analysis of what is specific to your business is crucial in ensuring that you have the right cover at the right time for your business. We have experts who can listen and work with you and your legal advisers to help identify what is important and assist in putting a plan in place that is tailor-made for you and your business that will ensure your business continues to survive even in the most difficult of circumstances.

Free Business Protection Review

Optometry Wales is offering a complimentary Business Protection/Key Person review to all Optometry Wales members. To take us up on this offer please...

We will assist you in considering what cover is right for you, the indemnity period required, and how to calculate the correct figures to ensure adequate insurance is in place.

Further Help and assistance

Optometry Wales Insurance Services is happy to discuss all the issues raised in this Newsletter with any member. Please do not hesitate to contact us should you which to discuss any aspect in more detail.