Keyperson Insurance

"how would your business be placed if one or more of your key people were not able to undertake their daily roles and duties for an extended period of time?"

Almost every business has one or more individuals whose knowledge, experience or business connections make them necessary for the continued success of their organisation.

These individuals are identified as “key people” and the prudent business will have a plan for their sudden departure in the event of death or disability. Without this plan, not only will the business face the normal emotional strain but also a potential financial crisis. It is worth noting some of the things that can occur if a key person dies or becomes disabled;

Banks & creditors:

Creditors get nervous with the loss of a key person.

Business revenue:

The loss of a key person can have a dramatic effect on future business sales and revenue.


Is there a risk that customers will be lost ? Will services be maintained as agreed ? Customers may look for alternatives.


A loss of a key person provides an opportunity to attack a client base. This can extend to poaching staff and takeover rumours.


Staff can become concerned at the loss of a key person and may consider alternatives. Loss of experience can be costly to a firm.

Key persons family:

The family of the key person will be distressed and may expect support from the company.

New staff:

There will be costs to recruit and train a replacement. It will cost more to entice a qualified person to fill the role.

Business goodwill:

Goodwill is often linked to a key person. The value of the business will be substantially reduced if that key person is lost.