Category Archives: Insurance
The quality and state of staff working within a given organization generally ends up determining the nature and extent of success it attains. This aspect seems to remain constant at all times, no matter how much its nature of business changes. Small business entities are quite relevant here in particular as they tend to rely more heavily on their staff. This makes it necessary to consider acquiring key man insurance policies as a way of safeguarding their long-term business interests.
Identifying the Key Person in the Organization
Business owners very well know which individuals play the most crucial role in achieving operational stability. These are they who keep the business running and without whom it would not function as normal. Protecting these individuals through keyman life insurance can prove strategic in shielding a business against the challenges posed by losing its employees for various reasons. It could for instance be prolonged absence or even demise of an integral member of staff. Such factors can easily determine whether your business succeeds or fails at any given time.
Necessity of Key Man Insurance
This form of insurance has been designed to address a contingency plan such as recruiting a suitable replacement for a key member of staff within an organization or perhaps training up a person to take up their invaluable role. The overall aim is maintaining the profits and overall interests of the affected business entity. This is undoubtedly the most useful application of keyman life insurance, yet not altogether the only one.
As an example, the associates of a deceased shareholder or partner in your business might come asking for their share soon after their demise. It would be prudent considering ahead of time if you would have funds available for them if such a scenario does occur. Failing such consideration, your business might by default find itself in an awkward position. Obtaining Keyman life insurance would address such eventualities. In this instance you would utilize the policy for making a payout to the claimants, thus discharging any legitimate claim they could have over your business.
Another instance is of a designated guarantor who dies before the loan gets processed by a bank. The bank might have to recall their loan under such circumstances and this could have dire consequences on business interests of the loanee. A suitable provider of keyman life insurance can however intervene during such uncertain times to redeem and rescue your loan, if covered under this policy.
Securing Keyman Life Insurance is in some way akin to securing personal life insurance. However, it differs slightly in that unlike personal life insurance, it involves insuring the lives of employees as opposed to family members and makes you and not the family members the ultimate beneficiary in case death of the insured person occurs.
Overall, the action of securing Key man insurance policy can introduce some sense of peace and stability within an organization especially during uncertain times. It secures firmly the interests of the business entity insured, whether relating to a partnership, limited company, sole trader or other business status.
People usually get into business to drive margins of profit and not merely turnover. Three primary ways exist by which someone can attain this goal. Consulting with the Trade Credit Insurance Expert - Niche Trade Credit and other competent service-providers within this field can help one to meet all these objectives. This applies especially for any Business to Business (B2B) firm selling on credit-terms. Taking this action can boost profitability by generating larger sale-volumes. It all leads to greater profitability and better efficiency as well as cost-cuts.
Gaining Better Sales via Trade Credit Insurance
Options for achieving greater volume of sales include selling more to the existing clients or initiating sales to a new breed of customers. Apart from knowing regular clients, it is critical to be informed about their ability of handling larger credit-lines.
Owners of businesses can research on their new customers, meet with them and discuss their future plans of trading with them. They may as well require checking out the financials of their clients, take their references and undertake small shipments for instance to minimize on business risks. Getting credit insurance by contrast affords business owners the flexibility of passing on credit-assessment matters to seasoned professionals within the industry. Pursuing that approach enables a business entity to trade more expansively. This undertaking provides the assurance of having the credit insurer replace an appreciable percentage of your working capital.
Credit Insurance Cuts down Costs
A client may default on an outstanding payment and leave you in a position of bad debt. If insured with industry-professionals like Trade Credit Insurance Expert – Niche Trade Credit however, such loss would be minimal. You would in fact require offsetting an appreciably-lower amount of sales to recoup the losses incurred by such debt.
Sales can only come from two primary sources, namely new and existing clientele. Research shows that it takes a larger amount of effort finding a new client as it does keeping an existing one. Having a bad debt not only affects the bottom-line of a company, but necessitates placement of the lost client as well.
Boosting Efficiency through Credit Insurance
It is vital to perform a candid evaluation of why business owners ventured into a particular line of trade in the first place and whether the business is enjoyable to them. You could be wasting time for instance assessing risks, collecting debts and chasing after new accounts to replace failed ones.
Purchasing credit insurance affords someone the benefits below in that case:
- Assessment of the credit-worthiness of existing clients
- Provision of framework for managing credit
- Collection of debts from clients
- Settlement of losses in default of successful debt-recovery
- Provision of access to cheaper funding
- Updates on economic developments in the applicable trading jurisdictions
- Provision of Powerful marketing tool which facilitates credit-checks of prospects before initiating the first contact
Owners of businesses can consider consulting with seasoned providers of trade credit facilities such as Trade Credit Insurance Expert – Niche Trade Credit to enhance their chances of experiencing the gains stated above.