Have any questions about how this can apply to you?
In most businesses, people are the main asset. They have all the ideas and knowledge and directly generate the company revenue. Without key people the business may have no value. A "key person" can be anyone within the business, not necessarily the owner. Losing a shareholder, or even a junior employee, can lead to a significant drop in profits.
Losing a key person could mean:
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Being unable to continue operating;
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Losing clients or damaging client relationships which can reduce revenue;
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Losing knowledge such as ideas for revenue, or internal operating method;
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the cost and difficulty of finding a suitable replacement;
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lowering of staff morale leading to lower productivity; and
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being unable to meet contractual arrangements which may incur penalties.
The potential for problems is almost limitless. An accident may incapacitate a person temporarily or leave them with permanent disabilities. Even if a key person has a partial disability it can be catastrophic for the business.