Key Person and Business Protection in 2027
How key person, shareholder, director's loan and relevant life cover work, how sums are set, and what to ask your accountant.
- What key person insurance is and who it suits
- The main types of business protection
- How the sum insured is set
- Ownership, trusts and how claims are paid
- Tax treatment: what to ask your accountant
- Lenders, loans and protection
- Costs, underwriting and timing
- Reviewing and claiming
- Tips and tricks, common mistakes and a checklist
- How OMB can support you
The short version
Key person insurance pays your business a lump sum if a vital director or employee dies or, with optional cover, is diagnosed with a critical illness. This guide also covers shareholder protection, director's loan protection, relevant life and business loan protection, and the tax questions to raise with your accountant.
- Key person cover is owned by the business, and the money is paid to the business, not the family.
- The business needs a genuine financial interest in the person insured, and the sum should be justified by evidence.
- Shareholder and director's loan protection solve different problems from key person cover.
- Tax treatment depends on the purpose of the policy, so always take advice from a qualified accountant.
- Lenders sometimes ask for cover on a commercial or business loan, and the right structure matters.
Start with the question of who matters
List the people whose loss would hurt profits, contracts or borrowing, then rank them.
What the full guide covers
- What key person insurance is and who it suits
- The main types of business protection
- How the sum insured is set
- Ownership, trusts and how claims are paid
- Tax treatment: what to ask your accountant
- Lenders, loans and protection
- Costs, underwriting and timing
- Reviewing and claiming
- Tips and tricks (8), common mistakes (6) and a 11 point checklist
- How OMB can support you, with a fictional worked example
A design agency protects its founder and its loan
Illustrative example only. Sam is the founder of a small design agency whose biggest clients work with him personally. The company is taking a business loan and the lender has asked for a director's personal guarantee. We helped Sam and his co-director list who matters to the business, estimated the profit that would be hard to replace for two years, and compared this with the loan outstanding. We explained how key person cover, director's loan protection and shareholder protection differ, and suggested he discuss tax treatment with the company accountant and the shareholder agreement with a solicitor before proceeding. This is not a real client, and all cover is subject to underwriting and policy terms.
Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.
Key Person and Business Protection in 2027
How key person, shareholder, director's loan and relevant life cover work, how sums are set, and what to ask your accountant.
Want to talk it through?
We help businesses identify key people, value the cover needed and compare insurers. We charge no fee for protection advice, and OMB receives commission from the insurer, confirmed before you proceed.
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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. Protection and insurance products are subject to underwriting and the policy terms and conditions. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.