Every company has one or two people the revenue, the relationships or the bank depend on. Sometimes that person is you.
Ask any owner which employee they could not lose and they answer in under a second. The rainmaker who brought in the top three accounts. The operations lead who is the only one who knows how the plant actually runs. The founder whose name is on the lending agreement. The company is built around that person, and the plan assumes they will be at their desk on Monday.
When they are not, the losses arrive in order. Revenue they carried walks out. A replacement takes a year to find and another to become productive. The bank, which underwrote the loan on that person’s involvement, reviews the covenant. None of it is a surprise. It was simply never priced.
Many commercial loans carry a key‑person clause. The lender can demand repayment or new terms when the guarantor or named executive dies or is disabled.
Clients hired the person, not the company. Without a plan for continuity, the book of business becomes an open question the competition is happy to answer.
Recruiting, a signing bonus, a year of ramp‑up and the lost revenue in between, all funded from the same operating account that has just lost its best producer.
Owners insure the building and the fleet and leave the person the whole enterprise depends on uninsured, because it never occurred to anyone to ask.
Life and disability coverage owned by the company, sized to replacement cost and the revenue at risk, so the business is paid to survive the loss.
Who steps in, what they are authorized to do, and how clients and lenders hear about it, decided before it is needed.
Where the risk is that the key person leaves rather than dies, coverage is only half the answer. Executive benefits tie the person to the company.
Older key‑person policies are often sized to the company as it was. We check the amount, the ownership and the beneficiary against the company as it is.
Every one of these runs through the CORE Process™ — with your CPA, your attorney and your other advisors building from the same plan.
The loan stays in place because the lender was paid what the covenant required. The replacement is hired without draining the reserves. Clients hear from someone with a plan instead of a rumor. And if the key person is you, the people you leave behind receive a company that can keep paying them.
Coverage a business owns on the life or health of an employee whose loss would materially hurt the company. The business pays the premiums and receives the benefit, which it uses to replace revenue, recruit a successor, satisfy lenders or, in some structures, fund a buyout.
Enough to cover the revenue that person generates over the time it takes to replace them, plus the cost of recruiting and any debt tied to their involvement. There is no standard multiple; we build the number from your financials rather than a rule of thumb.
Very often the owner is the most important key person in the company, and the least likely to be insured for it. Coverage on the owner protects the employees, the lender and the family who would otherwise inherit an enterprise that cannot run without them.
A short, private conversation to understand the whole picture — and whether our expertise can help.
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