What is key person coverage and why do you need to add it to your California Contractors Insurance plan? As key person coverage is an optional policy, it is not included automatically as part of a standard business insurance plan.

Key person coverage is a type of life insurance. You may need it if you have a staff member whose skills are critical to your ongoing operations and productivity. Should something happen to that individual, your business could face a lengthy shut down until you can replace them, meaning potentially significant losses. Unlike standard life insurance, key person policies are held by the business and the business is the beneficiary in the event that you need to file a claim.





Any payout you may receive can be used to meet ongoing financial obligations while you search for a replacement staff member. It won’t mean that you can instantly regain full productivity, but with the additional financial assistance provided, you should be able to manage any interim financial commitments.

Have a good look at your staffing structure. Do you have someone whose absence could cause a major disruption? It may be worth considering insuring him or her under a key person policy. Speak to your California Contractors Insurance agent to find out more about how this type of coverage might be of benefit for small businesses and partnerships.