Key Person Cover
How Key Person Insurance works
A claim can be made if a key person dies, or is diagnosed with a terminal or critical illness. The payout can be used to help the business while recruiting for a replacement or undergoing reorganisation.
Why Key Person Insurance is needed
Businesses need to be insured, but covering for the risk of losing a key employee is not a legal requirement. Because of this, it’s easy for businesses to overlook this protection. But this could be a mistake.
The loss of a key person can impact the business in a number of ways, including:
- Customers losing confidence in the business.
- Banks calling in loans.
- Suppliers asking for payment up front
Many businesses consider their staff their most valuable asset – and if your client feels this way about their workforce too, key person protection could be the cover they’re looking for.
Key persons in a business
A key person can be any individual who significantly contributes to a business’s financial success due to their:
- Skills
- Knowledge
- Experience
- Leadership
Key people can be found at any level or department of a business, but can include:
- Owners
- Managing directors
- Sales managers
- Research and development staff
- Creative specialists
- Technical experts
- Sole traders