November 26, 2018

Key Person Protection

Many business owners realize that their staff are their most valuable asset and invest a lot of money in them to retain them. What would the financial impact on the business be if a key staff member dies or becomes permanently disabled? How can the business be protected against such events? The solution is that the business takes out Key Person Insurance on the lives of key staff.


Business owners are at risk from the nature of their work. Key Person Insurance is an effective method of transferring the financial risk associated with the loss of key personnel to an insurance company. Key Person Insurance also offers contingent capital to fund the recruitment, retraining and replacement of a key person.

Without key person insurance, the following serious implications for a business may arise:

  • Profit may be temporarily or permanently affected.
  • The business can lose customers.
  • The creditworthiness of the business may be affected.
  • The business must incur high costs for recruitment and training.