Key Person (Business) Insurance

Have your business sleep easy with an InsuranceFit Key Person Insurance quote. Also known as Key Man Insurance, Key Person Insurance will protect the business where there may be a financial loss due to the inability of the Key Person to work in the business More >

What does key person insurance provide?

Key Person Insurance can be used to stabilise the business until a suitable replacement person is found who is capable of being trained to have the same key skills. More >

What about the reduction in capital value of the business?

Losing a key person can also adversely affect the capital of the business. Key person insurance proceeds can be used to maintain the capital value and stabilise the business. More >

Key Person Business Insurance - Peter, John and Tony’s story

Peter, John and Tony’s story

Roof Mates Pty Ltd is a business based in Adelaide and has three employees.

Tony (26) does all of the installation of the roofing, Peter (42) does the accounting and administration, while John (31) does the sales and marketing to attract new clients. Business revenue quickly builds up to $30,000 per month.

Regretfully, ten months later Tony falls from a ladder, becoming a paraplegic, and can no longer work.

Peter and John do not have the expertise to install roofs. Consequently, they have to find a skilled employee to replace Tony; however, they are unable to attract an experienced person, as they business is relatively new and potential employees do not wish to risk moving across to such a new venture.

As a result, Peter and John have to advise clients they cannot complete the roof installations they booked in. Clients go to Peter and John’s competitors to get their jobs done. Within a few months, Roof Mates Pty Ltd closed down.

A Trauma policy should have been taken out on Tony’s life. The sum insured should have been enough to cover revenue losses for six months, ie $180,000. The insurance funds could then provide a cash injection into the business upon Tony’s paralysis, allowing the business to show a strong financial position and attract a replacement for Tony.