The people you rely on
Consider the roles that are central to keeping the business running and where the greatest disruption might arise.
Business protection
Plan for the people behind your business.
A business depends on people as much as processes. We help you consider how protection may fit into your plans if a key person dies or experiences an illness covered by a policy.
Start with how your business works
Every business has its own responsibilities and relationships. The effect of losing an owner or another important person can vary considerably.
We start by understanding your business and the concerns you want to address. That gives the conversation a practical focus before considering any cover.
What we can discuss
Existing commitments
Your financial commitments and current arrangements help shape the questions that need attention. We can discuss how protection may fit into that wider picture.
A plan that stays relevant
Changes in ownership, responsibilities or the size of a business can affect earlier decisions. Reviewing arrangements helps keep the conversation connected to how the business works today.
What is key person insurance?
Key person insurance, also commonly called key man insurance, is designed to help a business manage the financial impact of losing someone important to its success. That person might be an owner, director or employee whose knowledge, relationships or contribution to profits would be difficult to replace. The terminology describes the role in the business, regardless of the person's gender.
Cover is generally arranged around the life of the key person, with the business receiving the proceeds of a valid claim. Depending on the policy, the insured event may be death or a specified critical illness. A payment could help meet recruitment costs, support cash flow or offset a loss of profits while the business adjusts. It does not replace the person's skills or guarantee that trading will continue unaffected.
This differs from personal life insurance intended to support an individual's family. Ownership, the purpose of the cover and who receives a payment all need to be established. We can explain how these questions fit into the scope of the business protection discussion available.
Assessing the financial impact of losing a key person
Begin by identifying where the business depends on particular people. Someone may generate a large share of sales, hold a specialist qualification, manage an essential process or maintain relationships that would take time to rebuild. Salary alone may not reflect the financial effect of their absence.
Consider the likely impact on revenue and the costs that would continue during disruption. Recruitment, temporary support and training a replacement may add to that pressure. Think through the recovery period as well: a few weeks of cover and a year of support address very different needs. Existing cash reserves or other arrangements may meet part of the requirement.
A useful discussion brings together recent financial information, a description of the person's role and an outline of the costs you want to protect. There is no universal amount of cover suitable for every business. As responsibilities, turnover and staffing change, the reasoning behind the original insured amount should be reviewed rather than left unchanged indefinitely.
Ownership, business borrowing and the wider plan
Losing a key person can create several different financial problems. Replacing lost profits is one. Meeting a business loan commitment is another. The future ownership of an owner's shares or partnership interest may raise a separate set of questions. A single policy should not be assumed to solve all three.
Business loan protection may be considered in relation to an outstanding borrowing commitment. Shareholder or partnership protection arrangements can involve funding for a purchase of an owner's interest after death or a covered illness. These arrangements need to fit the business's legal documents and the intentions of the people involved. Insurance on its own does not establish who can buy or sell an interest, or the price at which that happens.
Policy ownership and the treatment of premiums and proceeds can depend on the structure and purpose of the arrangement. Do not assume that premiums are tax-deductible or that a payment will be tax-free. Bring existing agreements and borrowing details to the discussion so any need for specialist legal or tax input can be identified.
How we work
A conversation is a good place to start.
- 01
Tell us what matters
Talk to us about your circumstances, your questions and what you want to achieve.
- 02
Understand your options
We explain how we can help and discuss the next steps, including any relevant fees.
- 03
Agree a way forward
You can decide how you would like to proceed with a clearer understanding of what is involved.
A little clarity
Questions you
may have.
Does the size of my business matter?
The useful starting point is who your business relies on and what you are concerned about. We can discuss your circumstances and how we may be able to help.
Can we review cover we already have?
Yes. Tell us about the existing arrangements and what has changed. We can discuss what needs to be considered before deciding on any next steps.
A wider view
Related services
Your next chapter
Give your continuity plans some attention.
Tell us about your business and the questions you would like to work through.