What does key-person insurance protect against?

Key-person insurance is specifically designed to protect a business against financial loss that may occur due to the death or disability of a key individual essential to its operations. This type of insurance policy ensures that the business has financial resources available to cover expenses, manage debts, and maintain stability while addressing the potential disruption caused by the loss of that crucial person.

The financial protection from key-person insurance can help fund the recruitment and training of a replacement or cover the loss of income that may arise from the absence of that key employee. The policy is typically taken out by a business on the life of an employee whose contributions to the business are deemed irreplaceable or exceptionally valuable. This way, the company can safeguard its future and foster resilience in the face of unforeseen events affecting their key personnel.