Key Person Protection Plans


Key Person Protection Plans (KPPP) are insurance products that protect the company from the loss of a key person. Key persons plays a pivotal role in the operation of the business. They are usually the owners or founders, plus one or two executive personnel that the company can’t function without. Not all companies have key persons, but if you have at least one that your business couldn’t operate without, then you need a KPPP. This is especially important if you’re a small business owner.

A key person will have exceptional skills, knowledge or technical abilities. The loss of that one person can severely impact the ability of the company to perform its duties for existing clients and reduce its ability to attract new clients. Credibility and brand is the new currency in the digital age, so the loss of one key person can cause your loyal clients to rethink your value.

The loss of a key person can cause problems with your clients, and may change the relationship your company has with suppliers, bankers and investors. The time you may lose learning all the former key person’s roles, responsibilities and touch points can also erode the confidence of any business associates. If the loss also means that your production goes down, then you have a serious problem on your hands.

You may be able to replace your key person, but do you really know what the new person’s role? Do you have a record of the processes that need to be continued? Do you know how to retrain the replacement? Will they need outside training or relocation? Do you need to employ an executive recruiting firm to fill the post? These situations all need financing before you can return the company to normal operations. You need to plan ahead to make sure the financing is there when you need it.

At Erven Planning, we can help you prepare for the loss of a key person and make sure that you have the appropriate financial products in place that will help you:

  • Recruit, relocate and/or retrain new personnel
  • Have the cash flow to fulfil any related debts with creditors
  • Communicate confidence in your company to your customers, suppliers, lenders and investors
  • Ensure that you continue operating

KPPP is something that must be seriously considered if you have executives and key people that are vital to your business.

At Erven Planning, we will work with you to find the right Key Person Protection Insurance for your company at the best price – ask us!