What is a Key Person's True Value to Your Business?
Some employees are indispensable. If you lost them, could your business survive the financial impact?
Key Person Value Calculator
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£
Contribution to Net Profit
Time to Replace & Train (Months)
Key person calculator guide for UK businesses
WeCovr's key person calculator helps UK business owners estimate the financial impact of losing a key employee, supported by FCA-authorised guidance and 900,000+ policies issued across protection products. It is designed to highlight the potential funding gap a business might face.
How the key person calculator estimates value
The calculator combines a profit-based approach with a replacement-cost approach. It estimates how much revenue or profit could be at risk and the cost to recruit and onboard a replacement.
It is a simplified model and should be used as a starting point for discussions about key person insurance.
Profit contribution estimates revenue risk.
Replacement cost estimates recruitment and training impact.
Results show a low-to-high range rather than a single figure.
When key person insurance is most relevant
Key person cover is most relevant when a person drives sales, client relationships, or specialist knowledge. It can also be critical for founders or technical leaders.
Why WeCovr supports SME protection
WeCovr provides FCA-authorised guidance with high customer satisfaction ratings. We also offer complimentary access to the CalorieHero AI calorie tracking app and discounts when customers take PMI or Life insurance.
Data sources and guidance references
This guide references FCA guidance on business protection insurance and UK SME statistics for typical margin assumptions.
Key person protection options compared
| Option | Estimated cost | Key factors | Best for |
|---|---|---|---|
| Life cover only | Lower | Pays on death | Mortality risk |
| Life + critical illness | Higher | Pays on diagnosis | Broader risk |
| Multiple key persons | Varies | Separate cover per role | Larger teams |
Related WeCovr resources
FAQs
What is key person insurance?
Key person insurance provides a payout to the business if a vital employee dies or is diagnosed with a critical illness, helping cover lost income and replacement costs.
How do I estimate the value of a key employee?
A common approach is to look at profit contribution and the cost to recruit and train a replacement, then compare both estimates.
Is key person cover tax deductible?
Tax treatment depends on policy purpose and structure. You should seek professional tax advice for your business.
Can small businesses use key person insurance?
Yes. SMEs often rely on a few critical people, so the cover can be particularly valuable.