Key person cover

Yes. Keyman insurance, key man insurance and key person cover are different names for the same type of business protection. The cover can protect against the financial impact of losing a key director or employee. The events covered depend on the policy selected; critical illness cover must be included if required.

Anyone whose loss could have a significant financial effect on the business. They do not have to be a shareholder: specialist knowledge, customer relationships or responsibility for revenue may make an employee key.

We assess the likely financial impact, including lost profit, replacement costs and the recovery period. Your accounts and the individual’s contribution inform our recommendation. The insurer may require financial evidence to support the amount.

For a limited company, the company commonly owns the policy and receives a valid claim payment. Partnerships and other structures can need a different arrangement. Ownership should be established before cover is put in place.

Sometimes, depending on the policy’s purpose and the circumstances. Cover protecting profits may be treated differently from cover protecting capital. The treatment of a claim also needs checking; your accountant should confirm both.

No. Life cover and critical illness cover have specific claim triggers. Critical illness cover only pays for conditions meeting the policy definitions. It is not a replacement for cover designed to pay during temporary incapacity.

No. Key person cover addresses financial disruption to the business. Shareholder protection is designed to help fund the purchase of an owner’s share. A business may need both for different purposes.

Yes. Based in Solihull, we advise business owners and directors across Birmingham and the West Midlands. We assess your needs, recommend suitable protection, arrange your insurance and review it with you as your circumstances change.