Keyperson protection

What is keyperson protection?

Keyperson protection is for businesses that have an employee who is vital to the business. The insurance pays a benefit to the business to ensure it  can keep going if this key person dies, or suffers a serious injury or illness that prevents them from doing their job.

Traditionally, this benefit is paid as a lump sum and can help with covering the cost of lost productivity and revenue or, if necessary, finding a replacement for the key person.

However, there is a new type of keyperson cover available – keyperson income protection.  This pays a regular monthly benefit if the keyperson is not able to work at their full capacity, due to illness or injury.  

How does keyperson protection (lump sum) work?

Keyperson protection is based on three of the standard forms of personal protection insurance: life insurance, trauma insurance, and total and permanent disability (TPD) insurance. The difference is that the business is the beneficiary of the insurance contract, so that:

  1. The business pays for the insurance.
  2. If a triggering event happens, the business receives a lump sum.

How does keyperson protection (income protection) work?  

Keyperson income protection insurance protects the business against a keyperson’s temporary absence from work, due to illness or injury, if they are away for longer than the selected waiting period.  Unlike personal income protection insurance, the business if the beneficiary of the insurance contract, so that:

  1. The business pays for the insurance.
  2. If a triggering event happens, the business receives a monthly payment until the keyperson is medically able to return to work, or for one year, whichever comes first.

How much does keyperson protection cost?

The cost of keyperson protection depends on the value of the insured person to the business, and on their level of risk. For keyperson income protection, it will also depend on their salary. Your CRA business insurance specialist will compare products from different insurers to get you the best policy to suit your requirements, at the best price.

What's the next step?

Talk to a CRA business insurance specialist. We'll guide you through the entire process, including applying for the required insurances and facilitating the necessary legal contracts. We'll also be here if you ever need to make a claim.

Make an appointment with a CRA business insurance specialist