The Risk

Key Man is a person who is a major driving force behind a business and who is so unique and valuable in all areas of the business that without him / her present there would be a substantial loss in the company’s earning capacity.  A company can have more than one Keyman.

The death of a Key Man could a cause a business to suffer many types of Losses:

	Loss of customers or sales attracted by his/her ability and personality
	Loss of his/her day to day specialized abilities
	Cost of recruiting and training a suitable replacement
	Delay or Cancellation of any business or project upon which he/she is working
	Loss of opportunities for future expansion
	Loss of stable management and good labour relations
	Reduction in the credit standing of the company
	Withdrawal of credit facilities by banks or other institutions
	Recall of existing loans guaranteed by the key man
	Refusal of suppliers to deliver goods without prior payment

The Solution

The objective of Key Man insurance is to indemnify the company for these losses and to allow it to continue as the same thriving concern that it was while the key man was alive and working. The beneficiary in such cases will be the company.

The Cover

	Only Term Insurance ‘pure risk’ plans are allowed under Keyman Insurance.
	The Premium can be paid annually, half yearly, quarterly, monthly, single payment.
	The Sum Assured depends upon the Company’s turnover, assets & profitability. It can be arrived at 5 times net income or 3
	times gross income whichever is less or by taking the yearly profit made by the company on account of Keyman and multiplying
	it by the years to be taken to find a suitable substitute or the expenditure that will be incurred to train a new man for the same
	job.
	Keyman may be required to undergo medicals depending upon the Sum Assured, Age & Term of the Plan.

Howden Insurance Brokers India Private Limited
Ground Floor, Bombay Dyeing Administrative Building
Pandurang Bhudkar Marg, Worli
Mumbai - 400 025, India.
Telephone: +91 22 6655 8888; +91 22 6655 8811
Telefax: +91 22 6654 8833
Email: utkarsha@howdenindia.com