It is important for growing businesses to have this cover in place in case the business experiences the loss of an individual who has guaranteed a loan. Lenders may have the right to demand the business pays back any outstanding loans which can be difficult at short notice.
The loss of a key person can put immense pressure on remaining owners if there are any outstanding financial commitments. A policy is taken out on the life of a key individual at your business so that any money due from a claim can be used to help pay outstanding debts or loans.
The level of cover should reflect the terms of your loan and the amount needed to pay any outstanding borrowings.