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‘Key person’ insurance could save your company from crisis


If your business can’t run properly without you, your company has a lot riding on you being able to work.  

When you are “a key person,” it means that your skills, knowledge, and talent would be hard to replace should you become disabled or pass away.

It’s not always something businesses consider, but it’s worth asking yourself what would happen if a key person couldn’t work. 

Would the bank call your loans? Would your employees feel safe and secure or would they start looking elsewhere? What about your clients? Would your competitors start moving in?

For Jamie Meldrum and Michael Horne, partners of local benefits firm Meldrum Horne, these questions are not theoretical. Thanks to their emergency transition plan and key person insurance, they successfully made their way through the loss of a key person for their business.

Meldrum Horne now helps other companies plan for the future and protect themselves against the unexpected. They specialize in helping people achieve their goals while mitigating their risk along the way.

Businesses may not realize the risk associated with being dependent on an owner, executive or CEO until it is too late, but it’s a scenario becoming more and more common. 

Even if the plan is to sell the business if something happens, it will be hard to get fair market value if the business is in turmoil. Nobody is going to buy your problems.

“Companies can lose out on future growth opportunities or their sense of financial security if that key person were no longer with the company,” says Horne. “It’s a gamble many businesses may not realize they are taking.” 

There are, however, preemptive measures companies can take to protect their assets in the event of a key employee or partner passing away or becoming unable to work due to a disability, such as purchasing key person insurance. 

Businesses who invest in the coverage are responsible for paying the monthly premiums, but they are also the beneficiary, which gives them the freedom to use the tax-free payout to support the company in whatever way they need. This can be anything from recruiting, hiring or training a replacement, to paying off debt and managing creditors, to reassuring customers, employees, and investors that the business will survive.

“At the end of the day, when it comes to future-proofing your business, not having a plan is planning to fail,” says Meldrum. “The most important investment is the one that pays you the most when you need it the most. Key person insurance provides you with an injection of cash at a terrible time and gives you a fighting chance to stabilize your business.” 

Planning for the future

Mapping out your company’s future can be a difficult process, especially when that company’s success relies on a few key players, but it’s never too late to start. Working with a trusted insurance provider can ensure your company is making the right choices for a sustainable future. 

For more information on key person insurance, or to find out how the team at Meldrum Horne can help your business plan for the future visit

Does your company have a key person? 

A key person is an employee or a business partner/owner whose skills and intellectual capital are so valuable that your business would suffer substantial financial losses due to that person’s death or inability to work due to a disability. This person has knowledge, skills or talent that few others can duplicate. The industry he or she works in, or the nature of the work, may be so specialized (such as research, design, or running the business) that there are few others with the skills needed. In addition, the unique skills held by a key person may not have been acquired through education or experience but through their own creativity, talents and interests.