Business
Insuring the people the business cannot replace overnight
Most businesses have one or two people whose absence would immediately affect revenue, lending or client relationships. Key person coverage puts capital in the company's hands while it recovers.
What it funds
Where the money goes
Revenue continuity
Covers the earnings gap while the business stabilizes, replaces the role and rebuilds momentum.
- Lost contribution
- Client retention effort
- Interim leadership
Lender and covenant relief
Many lending agreements require coverage on the principals. The proceeds can retire debt or satisfy the covenant directly.
- Loan repayment
- Covenant compliance
- Guarantee release
Recruitment and transition
Funds a search, a premium hire and the overlap period needed to transfer relationships and knowledge.
- Search costs
- Signing premiums
- Transition overlap
How we structure it
From identifying the exposure to an issued policy
- Step 1
Identify the key people
Owners, partners, top producers and the technical staff a client relationship is actually attached to.
- Step 2
Quantify the exposure
Contribution to profit, lending requirements, replacement cost and the realistic recovery timeline.
- Step 3
Set ownership and beneficiary
Usually corporate-owned and corporate-beneficiary, coordinated with your accountant and any shareholder agreement.
- Step 4
Place and review
We market it across carriers, manage underwriting, and revisit the amounts as the business grows.
Key person and buy-sell are not the same thing
Key person insurance pays the corporation for the operational loss. Buy-sell insurance funds the purchase of a departing owner's shares under a shareholder agreement. Businesses with more than one owner usually need both, and they should be designed together so the ownership and beneficiary structures do not work against each other.
Map your key person exposure
We will work through who the business depends on and what coverage would actually be needed.
Investco Financial is licensed in British Columbia and Alberta for insurance and related financial services. Information on this page is general in nature and is not individual advice. Coverage, eligibility and tax outcomes depend on your own circumstances and the terms of the contracts issued.