A small retail business in my community recently shuttered its doors when one of the partners was unexpectedly killed in an automobile accident. Even though the 25-year-old company had survived numerous economic recessions and changes in healthcare regulation, when the owner passed, the bank required the payment of the company’s outstanding bank debt, and the company was forced to dissolve.
Hundreds of businesses are affected every day by the unexpected death or disability of a key employee, manager, or owner. In the best cases, the business has prepared for the event and the consequences are not catastrophic. However, for most companies, the loss of a key stakeholder has a devastating effect and can result in layoffs, bankruptcy, or even complete failure. Fortunately, such outcomes can be avoided by the prudent purchase of insurance on “key” members of the business enterprise.