Notice: Trying to access array offset on value of type bool in /home/domains/vol3/229/2563229/user/htdocs/wp-content/themes/Divi/includes/builder/functions.php on line 2442
Key Person Business Insurance | Bright Money Independent

Key Person Business Insurance

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.

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.


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.

protect the super heroes in your business

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
Katy has breast cancer and takes early retirement
£200,000 benefits paid covers the loss of profits and pays for a new designer
Designs for You continues trading
Company does not take out any key person cover
Katy has breast cancer and takes early retirement
Company has no budget to cover loss of profits or hire a new designer
Designs for You can’t recruit to replace Katy putting the business at risk of closure