Key Person Cover

Keeping things running smoothly when the unexpected happens.

What is Key Person Cover?

Key Person Insurance is a monthly or lump sum payment that helps protect your business financially if someone essential to its success can no longer work due to serious illness, injury, or death.

People are often a business’s most valuable asset, especially those in pivotal roles. While many businesses insure their premises, equipment, and stock, they often overlook the people who keep everything running. Every team member plays a part, but there are usually one or two individuals whose absence would have a major impact on daily operations. These are your key people.

Key Person Insurance is essentially a form of life insurance that a business takes out on those individuals, whether it’s the owner, CEO, or a critical team member. It provides peace of mind and financial support, helping your business stay on its feet during what could otherwise be a very difficult time.

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Do I need Key Person cover if I'm a business owner?

If you’re the business owner, you probably already have a personal life insurance policy in place but that’s typically designed to cover personal debts and support your loved ones.

Key Person Insurance, on the other hand, pays a benefit directly to the business. This allows the company to manage the financial impact of your absence whether that means hiring a replacement, covering lost revenue, or simply keeping things running during a difficult transition.

Who qualifies as a Key Person?

A key person isn’t limited to just the owner or CEO. It can be anyone whose contribution is essential to the success and stability of your business, such as:

A specialist—like an engineer, designer, or technical expert—whose unique skills and knowledge are hard to replace.
A top-performing salesperson who maintains crucial relationships and drives revenue.
A founder who brings vision, leadership, or plays a central role in shaping the business’s reputation.

In short, a key person is someone whose absence would significantly impact the day to day operations or long-term success of your business.

Can I get Key Person cover if self-employed?

Many insurers offer Key Person cover for those who are newly self-employed or just starting a business, typically within the first three years. While these policies may come with reduced benefits or a shorter payment period, they can still provide valuable protection.

Your adviser can help you navigate the options and find cover that suits your stage of business and specific needs.

What would happen if I didn't have Key Person cover?

Only you can determine the potential impact on your business but the effects of losing a key person can range widely. In some cases, it may cause only minor disruption that can be managed with existing cash flow or reserves. In others, it could trigger major challenges such as serious cash flow problems, restructuring, or even the need to wind up the business.

It’s not just lost revenue to consider. There may be added costs for hiring and training staff, and important relationships or contracts could be put at risk.

Key Person Insurance helps ease these pressures, providing financial support when your business needs it most.