key person cover
who are key people?
Key people make businesses function. Imagine a car without an engine or without wheels. It wouldn’t go very far. Similarly, SMEs who are without a key person due to sickness or death will cease trading within 12 months, 52% of the time.*
Key people are often directors but can be anyone employed by the business. From managing or financial directors to head of sales or accounts. Any member of staff that your client’s business relies on heavily could be considered a key person.
State of the Nation Report 2021 | Legal & General (legalandgeneral.com).
what are the risks?
If your client’s business relies heavily on any of their key people, protecting against the risk of their absence due to sickness or death could mean the difference between staying in business or closing the doors for the final time.
If their top salesperson were to suffer a critical illness, how long could the business last without their productivity? How long could your client’s business survive without their head of accounts?  Having a lump sum paid to the business to cover lost profit, to meet expenditure or even to recruit a replacement could keep them on track.
Your client may be able to muddle through without support, but the toll this can take on staff can leave its mark. These risks extend beyond the business to the other members of staff, all of whom need the income for their personal lives.