Key Person Insurance

Protect your business against losing your key employees

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Protect your business against the loss of valuable staff

Some employees are pivotal to your business. Key person insurance provides a cash lump sum to your company if a key member of staff passes away or suffers a critical illness.

Essentially, it functions as a safety net that can enable you to fund any operations that help keep your business financially stable while you recover from the loss. 

We can tailor a bespoke policy based on the requirements and needs of your company, giving you the peace of mind that comes from knowing you'll have a financial safety net at an already challenging time.

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Who is considered a 'key person'?

If losing a specific employee’s knowledge, ability and experience could affect your company’s revenue, then you should be able to include them in your key person insurance policy. (This is especially true if they’re crucial to the day-to-day running of your business.)

Key people may include:

  • Key shareholders
  • Company directors/CEOs
  • Senior managers and sales staff
  • Operations and IT managers
  • Senior web developers

But, of course, depending on the nature (and size) of your business, you may want to include other additional team members on your policy.

(In some cases, if you’re an entrepreneur running a small business or you’re a sole trader, you’ll may need to insure yourself as a key person.)

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What are the benefits of key person insurance?

Key person insurance is there to provide a financial safety net to the business itself, rather than the person covered or their beneficiaries. 

The cash lump sum paid by the policy can be used to:

  • Pay back any business debt (such as an overdraft)
  • Recruitment costs for potential replacements
  • Pay penalties if you can’t deliver products or services to clients 
  • Help cover salaries, dividends and other costs if sales fall 
  • Cover any sole traders who are directly liable for business debt

How is the cash lump sum payout calculated?

The payout on you key person insurance policy can be calculated based on a number of factors, including:

•    Multiple of business profits 
•    Multiple of the key person’s salary
•    Existing loan amounts

Which option best suits you will depend again on the nature and size of your company, but if you're unsure, don't worry. Our specialist employee benefits team can help you select the policy that best aligns with your business needs.

When should you take out key person insurance?
 

There’s no right or wrong time to get started. It’ll come down to whether you feel you have employees in place who are pivotal to what you do. This can be true for businesses of almost any size.

A start-up business, for instance, could be just as in need of key person insurance as a global retailer, if the start-up is heavily dependent on the leadership and knowledge of one or two people.

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Why choose Howden?

We take a results-first approach. We empower our specialist broking teams to be proactive and flexible. To think out of the box and go the extra mile if that’s what it takes to deliver the best outcome for your business. 

We’re not interested in ‘one-size-fits-all’. We’re interested in your business and people, your goals and plans and your value and culture. By developing a deep understanding of what you do, we can better serve your needs. 

And because we’ve built up positive, long-term relationships with all the key providers in this space, we can ensure that your policy is backed by the right provider to suit you, and negotiate on your behalf to secure the best possible terms. 

Your best interests are our best interests

A lot of companies will say they’re invested in your success. We mean it. Howden is employee-owned, which means our teams will go over and above to deliver the best possible results for you as a client.

We're truly invested in your success, and when you ge the outcome you want from your policy, we all benefit.  To us, it's not about process for the sake of it. It's about our people delivering results for you as a client. 

That's why we say 'our people make it possible'.

Get in touch today for a confidential, no-obligation consultation

Whether you have an existing plan in place that you’d like to try and improve, or you’re in the early stage of implementing an employee benefits programme and you’d like help ensuring it delivers the results you need, we can help. It all starts with a confidential, no-obligation consultation. Just fill in our secure form below, and our specialist team will get right back in touch. 

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