Limited Company

All companies will have employees that are seen as key to its success and the loss of these key people may cause major issues.

Key person insurance is loss of profits insurance that provides a company with the proceeds from an insurance policy so it can continue trading if a key person dies or becomes critically ill.

The company can decide how to use the proceeds, which could include employing a permanent replacement if a key person dies or a temporary replacement if a critically ill key person intends to return to work. It can also use them to repay a company loan.

Although companies take out insurance on their assets such as business premises, they often overlook the most significant asset – its employees.

A key person is someone whose death or disability would have a serious effect on the company’s future profits. Key people in a business will be:

• the founder of the business who is still the main driving force
• those with valuable sales contacts
• a controlling director who has personally guaranteed loans made to the company
• those heavily involved in research and development
• the best in their line of work where an adequate replacement would be expensive to recruit
• a key sales person who contributes a significant amount to profits

If you feel that your company could benefit from key person cover, please contact us to arrange a free initial consultation.