At this time the company was looking to commence Key Man insurance and Share Purchase insurance, however these had not yet been implemented.
Without these insurances in place, the complexity of the deceased director’s circumstances made the settlement of his estate extremely challenging and time consuming (involving six different sets of legal advisers in total).
In the turbulent market conditions the company sorely missed the deceased director’s significant role in introducing new business. The overall impact on the company was devastating:
- For a considerable period, stress and distraction led to an inability for directors and senior managers to wholly focus on business strategy and performance.
- New business was significantly impacted for two years.
- Company turnover and profit reduced – the impact of which was estimated at circa £1million, which in turn increased stress on employees and affected performance.
- Redundancies resulted due to the impact on profit and the complexity of the issues arising.
A final settlement was reached after two years. Only then was the business able to begin to refocus on future strategy and development.
After the settlement, it was relieving and motivating that the company was able to restructure and go on to see good growth in turnover and profit. However, had the business implemented the Key Man and Share Purchase covers that it had been considering, the course of events would have been very different:
- The financial impact could have been minimised or, more likely, removed altogether.
- The settlement would have been significantly more straightforward and most likely completed within months.
- The business would have progressed with its planned growth strategies.
- An extremely difficult and emotional time for all involved could have been made dramatically easier.
Key Man insurance and Share Purchase insurance can help your business by providing a clear plan in the event of such an unthinkable disaster. It provides a process that ensures beneficial outcomes are reached quickly and efficiently for all concerned, thereby reducing the associated financial and emotional stress and pain to shareholders, the company and its employees.
Johnson Fleming Future Life Planning can help you.
Our team have extensive knowledge and experience in these areas, and are available to help your business stay protected from unexpected misfortunes of this nature.
For more information or to speak to one of our specialists contact us on 01527 571245 or e-mail info@johnsonflemingflp.com
