Key Person Insurance
In many companies, there are employees, known as key persons, who possess knowledge, skills, or experience that are so essential to the company's operations that it could have serious consequences if they suddenly can’t perform their job. In such cases, it is important that the company has taken out key person insurance to cover the financial losses if a key person suddenly becomes unavailable for an extended period or permanently.
What is a key person insurance?
Key person coverage is an insurance that protects businesses from the financial consequences that can arise when a key employee suddenly cannot perform their duties for the company. A key person could, for example, be executives responsible for overall decision-making or specialists with unique knowledge in a specific area.
Why choose key person insurance?
- Financial Security: Key person insurance ensures that the business can maintain its financial stability if a key employee becomes seriously ill or passes away.
- Continuity of Operations: The insurance helps cover the costs of finding and training a replacement for the key person, allowing the business to continue its operations without major disruptions.
How does key person insurance work?
Key person coverage works by the company taking out insurance on one or more key employees. If an insured key person becomes seriously ill or passes away, a payout is made to the company. This compensation can be used to cover lost earnings, recruitment costs, and other expenses related to the loss of the key person.
Benefits of key person insurance
- Increased Security: The company gains financial security and can focus on its core business without worrying about unforeseen events related to important key employees.
- Flexibility: The insurance can be tailored to the company’s specific needs and risks.
- Attractive to Employees: Having key person coverage can make the company more attractive to potential employees, as it shows that the business values and protects its staff.
Contact us
Are you interested in learning more about key person insurance and how it can benefit your business? Contact us today for a non-binding consultation.
We Often Get These Questions
No, as a general rule, the insurance does not cover pre-existing illnesses or conditions that have been active up to 2 years prior to the establishment of the insurance.
Claims should be reported directly to the insurance company, which will assist you through the process and ensure you receive the necessary support.
Any business can take out key person insurance. However, it is particularly relevant for small and medium-sized enterprises that rely on the unique skills of individual key employees.