Key Person Insurance

Protecting the key personnel in your business.

A ‘key person’ is someone who’s continued association with a business provides that business with a significant and direct economic gain. Economic gain means more than just profits.  It can, amongst other things, also include cost savings, capital injections, goodwill, access to credit and access to customers.

The owners of a business will usually be key people.  Key people can also include:

  • Managing director
  • Sales manager
  • Financial controller
  • Computer programmer
  • Specialist engineer
  • Famous actor
  • Working director
  • Silent partner

Most businesses take out insurance cover for assets that do not actively make them profits – their plant, equipment vehicles and buildings.  It is the human asset that, through initiative, drive, skill, specialist knowledge and ingenuity which, can actively generate profit from your business.

Key person insurance can compensate the business for loss of two different qualities:

  • business profitability (revenue purpose), and
  • the capital value of the business (capital purpose)

Note:  The type of policy used can impact on the taxation treatment of the premiums and proceeds.

For more information or to make an appointment to discuss your specific business needs please contact us.