Keyman Insurance

Keyman  is a type of life insurance policy to protect a business in the event of the death or incapacity of key personnel (eg owners, directors)
It can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The aim is to compensate the business for losses and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.

An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company.

This form of insurance is crucial to you as the employer because it is an offset to the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which you are likely to suffer in the event of the loss of a key person.