Key Person Insurance
Protect your business from the financial impact of losing key personnel
Your people are probably one of your greatest business assets, so how would your business cope without them? Key person insurance can help protect your business from the devastating financial impact of losing a key person – someone crucial to the day-to-day running of your company whose loss through death or illness would significantly impact your business’s financial position.
Key person insurance
Losing a key person will undoubtedly have emotional consequences, but you can mitigate the financial impact with appropriate insurance. When morale is low, key person insurance will provide a cash boost that can be used to cover various costs resulting from the loss of your key person and help stabilise the ship.
You’re probably used to insuring your business’s physical assets, such as your premises, machinery, vehicles, and computer equipment. However, insuring your people can be more complex. That’s why we’re here to assist. We can help you determine your key people and their worth to the business. Then, we’ll source and arrange a key person insurance policy that fits your needs. With cover in place, you can put the unthinkable to one side, knowing that if the worst happens, you’re financially covered.
Get in touch for an initial free, no-obligation chat with an adviser about securing key life insurance for your business.
Key Person Insurance FAQs
What is key person insurance?
Key person insurance pays your company a lump sum if a key person (someone whose loss could significantly impact the company’s profitability) dies or becomes critically ill.
How do you identify a key person?
A key person is typically someone whose skills, knowledge, experience, or leadership are crucial to the business’s success. A key person could be the owner, the CEO, a shareholder, or a highly skilled employee who would be difficult to replace.
Can a business take out key person insurance on multiple people?
Yes, a business can take out key person insurance on several individuals if the company’s success depends on multiple people.
How is the coverage amount determined?
The coverage amount should reflect the financial impact of losing the key person. The calculation to assess the key person’s financial value might include their salary, the cost of recruiting and training a replacement, potential lost revenue, and any debts or loans the key person might have personally guaranteed.
What can the insurance payout be used for?
The payout can be used to cover various costs. These costs could include finding and training a replacement for the key person, compensating for lost sales or profits due to the key person’s absence, paying off debts or loans that your business might struggle to manage without the key person, or keeping your business running smoothly during the transition period.
