What would happen to your business if a key team member suddenly couldn’t work due to illness or worse? For many small and medium-sized businesses, the loss of a key person can be financially devastating. That’s where Key Person Cover comes in — a vital form of business protection that ensures your company can weather the storm.
What Is Key Person Cover?
Key Person Cover is a life insurance and/or critical illness policy taken out by a business on an essential employee — someone whose skills, knowledge, or leadership are crucial to the company’s success. If that person becomes seriously ill or passes away, the policy pays out to the business, helping it stay afloat during a difficult time.
Who Counts as a Key Person?
A key person could be:
– A company director
– A top salesperson
– A technical expert
– Anyone whose absence would significantly impact operations or revenue
Why Is It Important?
Without Key Person Cover, your business could face:
– Loss of revenue
– Increased recruitment and training costs
– Disruption to client relationships
– Difficulty securing loans or investment
Having this protection in place gives peace of mind and financial stability when it’s needed most.
How Does It Work?
Your business takes out a policy on the key individual. If they’re diagnosed with a critical illness or pass away, the insurer pays a lump sum to your company. This money can be used to:
– Cover lost profits
– Hire and train a replacement
– Pay off debts
– Reassure stakeholders and investors
Is It Right for Your Business?
If your business relies heavily on one or two individuals, Key Person Cover is worth considering. It is especially important for SMEs, partnerships, and family-run businesses where roles are not easily replaced.
Let’s Talk About Protecting Your Business
At One Roof Financial, we specialise in helping businesses like yours put the right protection in place. We will guide you through the options and tailor a solution that fits your needs.
📞 Ready to safeguard your business?
Contact us today on 01455 63 61 63 to book an initial consultation with adviser or message us via our website: https://onerooffinancial.co.uk/contact/
Blog written 01/10/2025
The information contained within this blog was correct at the time of publication (01/10/2025), and is subject to change.
