• Pauline Handy

Does Your Business Depend on an Irreplaceable Person?

Updated: Jun 6



You most likely have general liability coverage for your business, but are you protected if an essential employee or business partner suddenly dies? You risk losing a unique skillset, clients and revenue. We can help guide you on how to insure against the loss of key people in your operation.


Protecting Your Business and Your Brand

Your business is a pillar of your community, and the name on the door is one that people recognize. Your business partner is a visible part of the brand you’ve spent years building, a cobranded asset that your clients and vendors have learned to trust.


Think about what would happen if your partner suddenly died. Clients could start to pull their accounts, wondering where the business is headed. They might see the death of your partner as a dealbreaker. Meanwhile, operations and payroll continue. You’re left searching for a replacement, trying to provide reassurance and struggling with the financial and emotional fallout — by yourself.


Key person life insurance helps when your business needs extra funding to stay the course after an essential person dies. We can help you with a plan to minimize financial liability and provide relief when your business needs it most.


Life insurance for your business

Much like personal life, key person life insurance helps cover the financial gap when death causes a strain on funds. A policy can help to:

  • Fortify the business with a boost of cash to cover operational expenses during the transition

  • Fund a buy-sell agreement that requires a buyout of ownership shares

  • Secure bank or other investor loans requiring collateral or guarantees

  • Resolve potential insolvency issues

  • Provide the business with cash for employee severance pay and shutdown expenses if the business is unable to continue

  • Settle the business estate and provide replacement income to the remaining family members

Who is a key person?

There aren’t specific requirements defining a key person, but you should consider this coverage for any partners or employees who have a significant impact on your business income, such as:

  • Owners or partners

  • Executives or C-suite officers

  • Top salespersons

  • Product development professionals

  • Creatives

  • High-profile employees or influencers

  • Entrepreneurs

  • Sole proprietors

You can structure key person life policies in several ways, such as:

  • Each individual buys and pays for a policy on the remaining key persons (the individual as beneficiary)

  • The business entity buys and pays for all policies on key persons (the business as beneficiary)

  • One policy insures all named key persons, but with a “first-to-die” provision (premiums are usually lower because only one life is covered)

  • Buying term, whole or universal life insurance (some policies even build cash value over time)

We can provide you with resources to help you navigate the options available so you can decide which one works best for you. We can also help you select and manage insurance for your overall business needs. Our clients benefit from the convenience of having one resource for their business protection needs.


We’re here to answer your questions

Any life insurance purchase requires a complicated and honest conversation, but it’s also a necessary part of risk management. We’re here to help you through your options and reduce the complications. Give us a buzz – we’ll direct you to an insurance professional who can set up a time to go over the details with you.


Call us at V.F. McNeil Insurance (203) 481-2684, or request an appointment online to learn more about protecting your business with the right type of business insurance.

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