Buy-sell and key person insurance help protect businesses against the financial and operational impact of losing an owner or an essential employee. From funding ownership transfers to protecting revenue, supporting debt obligations and maintaining business continuity, these covers play an important role in helping businesses navigate unexpected events with greater confidence.
What is buy-sell insurance?
Buy-sell insurance provides succession liquidity if one or more business owners dies, becomes permanently disabled, or suffers a traumatic health event. Having buy sell insurance means the surviving owner(s) can buy out the departing owner’s share, without financial strain, disputes, or involving family members who don’t want to or aren’t able to run the business.
What are the benefits?
Some of the benefits of buy-sell insurance include providing immediate liquidity to fund ownership transitions, securing a fair and pre-agreed valuation of equity, preventing disputes between surviving owners and the departing owner’s estate, avoiding forced sales or unwanted external buyers, and giving owners and their families certainty about what happens to equity at the moment it matters most.
What can it cover?
- Lump sum benefit to fund the purchase of a departing owner’s equity on death, TPD or trauma
- Cross-purchase, trustee or self-ownership structures depending on tax and legal requirements
- Prevention of disputes between surviving owners and the deceased or disabled owner’s estate
- Fair valuation and protection against forced sales or external buyers
What is key person insurance?
Key person cover protects profitability from the financial impact of losing an individual whose knowledge, skills, relationships or leadership are essential to the business. When structured alongside buy-sell cover, both the business and the people behind it are protected.
What are the benefits?
Some of the benefits of key person insurance include protecting business revenue and profitability during a period of transition, covering the cost of recruiting and training a replacement, supporting debt repayment or restructuring, maintaining lender and investor confidence, and keeping the business stable while succession plans are implemented.
What can it cover?
- Key person life and trauma cover for critical employees, executives or specialists
- Business revenue and profit protection during the transition period
- Funding for recruitment and training of a replacement
- Debt repayment or restructuring where a key person was integral to the lending covenant
- Support for lender or investor confidence
What usually isn’t covered?
- Fraud or deliberate misrepresentation
- Intentional self-injury
- Criminal acts
- Pre-existing conditions not disclosed at inception (subject to policy terms)
Other cover may be considered and additional exclusions may apply.
At DKG Insurance Brokers, we understand that the needs of each customer are different, therefore we will take the time to assess your individual risk requirements and deliver a bespoke solution. Please reach out to one of our experienced brokers today.
Important note− The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about buy-sell and key person insurance, please consider the Product Disclosure Statement.
A buy-sell agreement without the right funding behind it offers little real protection. When insurance is structured in close coordination with your legal and accounting advisers, it gives owners and their families genuine certainty at the moment they need it most.
Why Choose DKG People Risk?
Please reach out to Marnie Maloney, Head of Life and People Risk via email or call on 1800 252 926 to learn more about how we can tailor buy-sell and key person insurance solutions to meet your unique needs.
Choosing DKG People Risk means partnering with a team that is deeply committed to your success. Our experience, combined with a profound understanding of both employer and employee needs, positions us uniquely to deliver solutions that truly make a difference.
With DKG People Risk, you’re not just investing in insurance products; you’re investing in a brighter, more secure future for your entire organisation. Together, we can navigate the complexities of today’s workplace and build a foundation for sustained success.
We invite you to discover how DKG People Risk can help you protect your most valuable asset—your people. Let’s work together to create a supportive and resilient environment where both your employees and your business can thrive.
A buy-sell agreement without the right funding behind it offers little real protection. When insurance is structured in close coordination with your legal and accounting advisers, it gives owners and their families genuine certainty at the moment they need it most.