What is Keyman / Key Person Insurance?

This is insurance designed to protect a company from the loss of a key person within the organisation. This is used by both the largest companies in the country and small partnerships alike.

What is it designed to do?

For large organisations it is designed to assist them to overcome the loss of a key person. When a company loses a key person often profitability can be affected, and therefore insurance helps cover this loss.

For smaller companies with partners, it is designed to protect each partner. If a partner of a firm dies, usually the other partner or partners need to purchase the shares of the business from the deceased family. Having insurance permits this to be easily facilitated with correct buy-sell agreements in place.

How Much Cover should be established?

This is entirely dependent on the size of the business and the person that is to be insured. It could range from $500,000 up to $10m of cover.

What else should small business partners examine?

Most business partners will make it a binding requirement that partners have income protection insurance. This means that in the event that one partner is unable to work for an extended period they will not be drawing a salary from the business and affecting overall performance. The partners pay the premiums for income protection, which in turn, provides their income if they are unable to work due to sickness or injury.

How do I find out more?

Submit your contact details in the form below and a consultant will contact you to discuss options.