Key Person Insurance.

Key Man or Key Person Insurance is a business protection policy that pays out if a crucial individual—such as a founder, director, or top salesperson—dies or becomes critically ill. The business owns the policy, pays the premiums, and receives the payout. That cash can be used to cover lost revenue, recruit a replacement, repay loans, or simply keep things running while the business stabilises.

A key person is anyone whose absence would seriously impact profits, operations, or growth. This often includes business owners, partners, senior leaders, or employees with rare skills or major client relationships. If losing them would cause financial stress, delayed projects, or nervous lenders—chances are, they're a key person worth insuring.

Possibly - but only in certain situations. In the UK, premiums may be treated as an allowable business expense if the policy is solely for business protection and the proceeds are not intended to benefit shareholders personally. However, HMRC looks closely at how the policy is structured, and tax treatment can vary, so professional advice is strongly recommended before taking out cover if you need the policy to be tax-deductible.