Having served on a town council in the past, my opinion is the more the municipality is treated as a business the better it works for everyone involved. From where I sit today I can see instance after instance where the lack of planning for a small expenditure, key person business life insurance on the management team, leaves towns and cities struggling when they could be hitting home runs.

A city manager should be considered a key person if you look at municipal government as a business. I think just as important, if not more, would be the police chief. There might be others that are, by virtue of the professionalism with which they do their job, might be very hard to replace if they unexpectedly die. So, for the local government, what would key man life insurance do? Depending on the size of the town or city, as a council tasked with filling those empty shoes, it would be a huge plus to have a little hiring bonus available. No towns have a budget for hiring bonuses, so if there was, say, a $250,000 key person life insurance policy on a person that was critical to the running of the local government, the governing body can boldly go after the best person. It might not even require advertising the job.

If I were a Councillor again I would want the insurance put in place and I would also ask the insured who they would recommend to replace them if something happened. If they died I would contact that person and offer them a life insurance signing bonus to give their notice and be on the job as soon as possible. If that person wasn’t available the council could advertise for the job and say right up front that there is a substantial signing bonus available to the right person. I’m thinking that will draw interest from potential replacements that might not otherwise consider moving to Silver City, NM or Douglas, WY.

Finding the right leadership for a city workforce or a city police department, or a city utility department can be a daunting task and while an interim isn’t too hard to find among the current employees, generally the best permanent replacement is found elsewhere. Consider the difference having that life insurance influx could make when you hang out the help wanted sign for a new city manager or police chief.

Bottom line. Businesses use business life insurance all the time to make sure a death doesn’t drop the company to its’ knees. If you think about it, the same thinking could be used with municipalities and non profit organizations. If you have any questions or want to learn more about how business insurance can work for other entities, and determine how much sense it makes for smooth transitions, call or email me directly. My name is Ed Hinerman. Let’s talk.

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