Key Person Insurance
Preparing for the Worst
Every employee adds value and provides important services to an organization. However, within every business or department, there is often a “key person” — an individual whose absence could significantly impact operations and the company’s ability to meet its obligations.
Key Person Insurance, sometimes called “Key Man” Insurance, helps protect a business in these situations. This coverage can provide funds to conduct national searches for a replacement with specialized skills, bridge economic gaps, maintain payroll, or cover other expenses associated with the unexpected loss of a chief executive, senior manager, or board-level leader.
By offering this protection, businesses can safeguard continuity, minimize financial disruption, and ensure critical roles are quickly filled, preserving the organization’s stability and long-term success.
Benefits of Key Person Insurance
Key Person Insurance in Small Businesses
In small businesses, the key person is often the owner or sole proprietor. In these cases, Key Person Insurance can provide financial security for employees and the surviving dependents of the business owner.
By structuring a life insurance or disability policy for the owner, the business gains the ability to continue paying payroll, cover routine expenses, and take the necessary time to plan for succession — whether that involves selling the business, transitioning operations to a new CEO, or passing management to family members.
Key Person Insurance also provides funds to maintain relationships with customers and clients who may be affected by the loss of a small business’s key individual, helping preserve business continuity and allowing the company to navigate the transition period with stability.
Key Person Insurance in Larger Companies
Larger companies may need Key Person Insurance for multiple critical roles across different areas of operation. Within these areas, there are often employees whose absence could disrupt daily operations until new technical expertise is recruited.
While cross-training is always recommended, some roles require specialized qualifications, certifications, licenses, or experience that can take significant time and resources to replace.
Key Person Insurance provides the financial resources to help larger organizations navigate these gaps — covering recruitment costs, temporary staffing, and other expenses necessary to maintain continuity. Professional Benefit Solutions works with businesses to identify key roles and secure the appropriate coverage to protect your operations and long-term stability.
Our Customers
“There are aspects of what we do that require people with really specialized training. They aren’t people you find easily and we work hard to keep those technical people here because replacing them takes time and it can bring our business to a real slowdown. We’ve done all the cross training and back up we can, but if our programming engineer died suddenly, we are going to need some time to get things running again.
Professional Benefit Solutions thought to ask us about whether we had essential personnel and they suggested that we take out Key Man Insurance so that if something awful were to happen, we would have money to do a national search and create the incentives we might have to put together to hire the person or people we would need.
We have been blessed that nothing has happened, but it is reassuring to know that we would have the ability to buy some time if we had to.”
– Thomas, business owner