Business Asset Protection Insurance

Business asset protection insurance is a type of key person insurance (formerly known as keyman insurance). The other type of key person insurance is business revenue protection insurance.

In the event of death or incapacity of a key person within a business, business asset protection insurance can be used to:

• Pay down any debt owed by the business.
• Remove any debt/guarantees provided by a key person to the business.
• Compensate the business for any expected loss of goodwill.

Who is a key person in a business?

Most businesses have one or more key persons whose skill, knowledge, experience and/or leadership are pivotal in generating revenue. 

A key person may be one or more of a number of employees or business principals. They include:

• A revenue producer, such as a salesperson.
• The owner of key intellectual capital.
• The name behind the business (i.e. goodwill).

What does business asset protection insurance cover?

Business asset protection insurance provides cover for ‘capital purpose’ debt in the event that a business principal or key person dies or becomes disabled.

Business asset protection insurance can provide cash.  This enables the business to:

• Repay debts to preserve its asset base.
• Protect the owner’s personal assets.
• Remove any personal guarantees that the business owners have provided.
• Free up cash-flow.
• Maintain the business’ credit standing.
• Compensate the business for any expected loss of goodwill.