Key Person Cover

What is Key Person Cover?

One of the most valuable assets of a business is its staff, with business success or failure depending on them.

Some of these people because of their specialised knowledge, skills or contacts, are vital to the profitability of the business. They are often referred to as ‘Key Persons’ as their death or incapacity could result in the financial performance of the business being adversely affected. Such an event could lead to a significant fall in profits, perhaps to the inability to repay loans or meet other obligations and, in extreme cases, to the collapse of the business.

Just as it is necessary to insure a business against the loss of or damage to physical assets, it is also vital to insure against the loss and/or against the serious illness/disability of a key person.

It is usual for the level of cover to be determined in one of three ways:

• Payroll-based approach
• Salary-based approach
• Profits based approach

Find out more in our Key Person Cover Guide

Tell me more about Key Person Cover