Key Person Cover

This Key Person insurance cover insures that the continuity of the business, should the keyman / key person pass away or become permanently disabled, by providing bridging finance and precious time to replace that person without the company suffering financial losses. Key Person insurance cover absorbs business disruptions and provides the funding needed to recruit and train a suitable replacement.

The keyman / key person is the employee that is extremely important to the business; it can be the owner, a partner, and stakeholder, basically anyone that the business would not cope without. Not only is this crucial to the business itself, but also a good thing to show investors and lenders because it means that their loans and investments are protected. The keyman / key person is informed about, and agrees to the keyman insurance on their life.

Key Person insurance benefits can be used strategically to buy out the insured person’s shares or interest in the company. Premiums are based on many factors, age, physical condition, health history and amount of coverage of the keyman / key person.

Business owner needs to:

• Estimate the value of Key employees
• Determine if separate insurance for each keyman / key person is needed
• Create a business-continuation plan