Key Person Insurance: Protecting Your Business When It Matters Most

We insure our buildings, our vehicles and our stock — but the people who actually drive the business are often left uncovered. Key person insurance closes that gap.

What is key person insurance?

Key person cover is a life (and sometimes disability) policy that a business takes out on an individual who is critical to its success. The business owns the policy and is the beneficiary, so if that person passes away, the benefit is paid to the business — not the family — to help it weather the loss.

Who counts as a "key person"?

It's anyone whose absence would seriously hurt the business, such as:

• A founder or managing director whose relationships and decisions drive the company
• A top salesperson or rainmaker responsible for a big share of revenue
• A specialist with rare technical skills or key qualifications
• A partner whose funding or guarantees the business relies on

How does it protect the business?

The payout gives the business breathing room to absorb the shock and keep going. It can help:

• Cover lost income while the business stabilises
• Fund the cost of recruiting and training a replacement
• Reassure lenders, clients and suppliers that the business is secure
• Settle debts that the key person had personally guaranteed

Related business cover

Key person insurance often sits alongside two related arrangements. A buy-and-sell agreement lets surviving owners buy back a deceased partner's share so ownership stays in the right hands, while loan collateral cover secures business finance against the loss of the person behind it. All three can be structured through business life cover.

How Excessible can help

We help business owners identify their key people, work out the right level of cover, and put the arrangement in place — including aligning it with your shareholder or partnership agreements. See our Business Life Cover page, or read about Lifestyle Protector for the broader life cover it's built on.