Key Person Insurance

You would probably find it unthinkable not to have insurance protecting your business from the effects of fire or burglary.

However, the effect of losing one of your key directors/employees from within the business could be much more difficult to recover from.

Most businesses have an individual who is key to the success and profitability of the business, a 'key person'. The death or serious illness of a keyperson can financially impact your business in the following ways:

  • The costs of recruiting and training a replacement.
  • A loss of sales and new contracts.
  • A loss of confidence in the business.
  • Additional pressure on senior personnel covering the key person, possibly causing some staff to leave.

  • Your business may have to be run without one of the key people who contribute to its success. How would you cope?
  • If a key employee in your business suffers, say, a severe heart attack, it is unlikely that they would be able to return to work for quite some time, if at all. However, they may still expect to receive an income from your business.
  • The plan is taken out normally on the life of the keyperson but is owned by the business.
  • The cover provides a financial safety net that could help cover loss of profits, cash flow and replacement costs.
  • The company owns the plan, pays the premiums and in turn receives the proceeds. The company then has complete control over how and when the proceeds should be used.
  • The policy value should reflect how much the profitability of the business can be assigned to this person alone.

Words of Wisdom

"Most business owners are so busy running their business that often they don't have time to think about, 'What happens if....'. Having a 'Plan B' if things go wrong can be the difference between the business continuing to trade or not."

Duncan Nash - LifeSearch Business Adviser

Specialist advice, impartial, free.

Speak with a business protection specialist who can answer any questions you have, and find the most suitable cover for your business, employees and your family.

Call 0800 804 6813

Mon-Thurs: 8am-8pm,
Friday: 8am-7pm
Saturday: 9am-2.30pm