Business Insurance
Keyman (Key Person) Insurance
Insurance a business buys to protect itself financially against the loss of a key employee, founder, partner or director whose death or a specified covered event could cause significant financial loss to the business — subject to policy terms.
Who is a key person?
Someone whose skill, relationships, reputation or leadership would be hard to replace quickly — founders, rainmakers, technical leads, or partners whose absence could shrink revenue or credit access.
Why businesses may need it
To fund recruitment and training, offset lost profits, reassure lenders/investors, or help surviving partners buy out a deceased partner’s share — depending on structure and policy.
Who owns / pays / receives
Typically the business owns the policy and pays the premium; the business (or a designated beneficiary arrangement) receives the benefit. Structures differ for partnerships and companies — get professional advice.
Keyman vs ordinary life insurance
Personal term life protects the family. Keyman cover is designed around business financial loss. Do not treat them as interchangeable without checking ownership, beneficiaries and tax/accounting treatment.
Tax / accounting
Treatment of premiums and proceeds can vary by entity type and purpose. This page does not provide tax advice — consult a CA.
Exclusions & conditions
Cover depends on definitions, exclusions, waiting periods and underwriting. Never assume every cause of loss is covered.