Key person insurance is a policy taken out by a business on its most important individuals. If a key person — a director, founder, top salesperson, or specialist whose absence would significantly impact the business — dies or is diagnosed with a critical illness, the policy pays a lump sum directly to the company.

That money can be used to cover lost profits, fund the cost of finding and training a replacement, repay business loans, or simply keep the business stable during an incredibly difficult time.

Ask yourself: if one specific person in your business couldn’t work tomorrow — would the business survive? Would you be able to keep clients, meet commitments, and cover costs while you found a replacement?

For many small businesses, the answer is no. And that’s exactly what key person insurance is designed to address.

• Covers three risks in one policy: accident, sickness, and involuntary redundancy

• Monthly payments — typically linked to your mortgage or a set monthly amount

• Short-term cover — usually up to 12 or 24 months per claim

• Available as standalone cover or combined with other protection policies

• Can be tailored to include just one or two of the three risks if preferred

The tax treatment of key person insurance depends on the purpose of the cover and how the policy is structured. We can discuss the options with you and recommend you speak with your accountant to ensure everything is set up correctly for your business.

We’ll help you assess your exposure and find the right cover — free, no-obligation business insurance advice.