Key man cover, also referred to as key person cover, is designed to provide financial protection to a business against the death or long term absence of an employee or director who is key to the success of the business. Endsleigh have team of specialist advisers who are able to advise on Key man insurance for your business.
Key man cover is worth considering if your business relies on an individual or individuals - whether that is to design products and systems, to generate new business or if they have specialist skills that are crucial to the success of the business. The loss of a key person could have a significant impact on your business and key person insurance is designed to provide an income to cover potential lost revenue plus the costs of sourcing and training a replacement member of staff.
Key man insurance is a type of life insurance policy that is taken out by a business on the life of a key employee. It is also possible for the policy to pay out in the event of the key person being diagnosed with a specificed critical illness such as cancer or heart attack.
Shoud the key person die or suffer from a critical illness the policy would pay out a lump sum to the business and the business can use these funds to cover the costs of losing the key employee whilst they recruit an train a replacement.
The loss of a key employee could have a significant impact on the company's income or future profit and it could be extremely expensive to find a replacement for this employee (recruitment and training costs). Key Man insurance is designed to cover loss of income / profit plus the cost of sourcing a replacement employee.
Key man cover can be taken out at any time and will pay out a lump sum in the event of the key person's death or being diagnosed with a critical illness (if critical illness cover is added to the policy).