It pays the business, not the key person, if someone the business depends on can’t work because of illness or injury. After a waiting period, it pays a monthly benefit for a set period, which the business can use to cover lost revenue or to hire and train a replacement. It suits businesses with more than one employee: if it’s just you, in your own corporation, look at business overhead expense insurance and your own disability coverage instead.
How does key person disability insurance work?
Reviewed by Garrett Agencies Ltd., October 2026. How we write
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More about key person insurance
Protects the business if it loses someone whose skills, contacts or sales it depends on.
Also about: Business-owned disability insurance
More questions about key person insurance
- Who qualifies as a “key person” in a business for key person insurance?
- What business risks does key person insurance help address?
- How long does key person life insurance provide coverage?
- How long does key person disability insurance provide coverage?
- How is “total disability” defined in key person disability insurance?
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