Protecting key personnel

Managing the risk that could ultimately threaten your company’s profits

A vital part of any business is the people who work there. But what if something happened to one of the key personnel in your business, for example, if an important member of staff died unexpectedly or became unable to work due to a serious illness. This could have a considerable impact on the core operations, sales and profit of your business.

Key person insurance is cover that pays out for loss in the event of either death or disability of the important individuals within a business and is designed to protect or compensate the business.

Is your business at risk?

Small and medium-sized businesses could be particularly at risk. However, there is a solution – insurance that would replace the lost profits caused by the loss of a key person. Typically, the liability of any such insurance is the estimated cost of the loss, for example, in business or revenue lost, and/or the replacement of that individual.

Key personnel to consider

The people who create the business and steer it in the
right direction

The people without whom your business would lose sales and profits

Directors, partners and shareholders

Integral managers, or key IT development specialists or development operators

Types of cover

There are various types of insurance policy that can be used for this purpose. There might be a short-term need for cover, for example, during an important project. In this situation a term assurance policy may be the most appropriate solution. However, if the key person is likely to remain with the business for an indefinite period of time, whole-of-life assurance may be more appropriate.