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Key Person Business Insurance

Key Person Insurance, also known as Keyman Insurance, can be described as an insurance policy taken out by a business to compensate for the financial loss that would arise from the death or incapacity of an important or key member of the business. Employees of all types, particularly those with specialist knowledge or skills can be Key people.

The loss of a key person in your business could have a severe impact. The business could be hit by a loss of profit, reduced sales, recruitment and training costs and increased workloads for the remaining employees.


How much cover is needed will be different for every business. There is no single way to calculate the financial value of a key person.

When calculating the extent of any business cover required you will need to consider – loan repayment, replacement of lost profits, cost of recruitment of replacement personnel, and repayment of partners/directors loan accounts.

This plan is owned by the business, they pay the premiums and any pay out is made to the business if they find themselves in the situation of needing to make a claim.

Depending on the ownership structure of the keyman insurance, you may find that premiums are tax deductible or that tax is payable on the benefit paid out at the time of claim.

Case Study

“Designs for You” is an interior design company offering a complete service to high end clients. Katy the key interior designer is famous for her designs, flair and creativity:

The owners want financial protection if Katy, who is key to the business were to suddenly die or be diagnosed with a serious illness
Company takes out key person cover on Katy’s life to protect £200,000 of profits Company does not take out any key person cover
Katy has breast cancer and takes early retirement Katy has breast cancer and takes early retirement
£200,000 benefits paid covers the loss of profits and pays for a new designer Company has no budget to cover loss of profits or hire a new designer
Designs for You continues trading Designs for You can’t recruit to replace Katy putting the business at risk of closure

Read more....


You can choose how Bright Money Independent Ltd are paid for mortgages; typically we do not charge however, you can pay a fee, usually 1% of the loan amount,
in cases that more work is required we may agree a fee upfront before any work is undertaken.
For Equity Release we are typically paid by the lender, however we offer a fee only service which is 1.5% of the loan amount.
Trading Address - 5a Cornmarket, Thame, Oxfordshire, OX9 3DX
For protection insurance we offer products from a limited panel of providers
For buildings and contents insurance and accident sickness & unemployment insurance we offer products from a selected panel of providers.
Registered Address - Coleridge House, 5-7A Park Street, Slough, SL1 1PE | Registered in England No 07801150