How Long Could Your Business Keep Trading If You Lost a Key Person?
No pressure, no jargon. A short call to work out whether this cover fits your business.
How long could your business keep trading if you lost a key person? For almost a quarter of UK businesses, the honest answer is a month or less. New research by Scottish Widows, carried out by YouGov with 2,019 business owners in 2026, found that 23% could only keep going for up to one month after losing someone they rely on.
That is a striking figure when you consider that 94% of owners say they have at least one key person. Below, we look at what the data shows about key person risk, how few businesses have a plan for it, and how you can work out your own trading runway.
Key facts
- 94% of UK business owners say their business relies on one or more key people (Scottish Widows / YouGov, 2026).
- 23% of UK businesses could keep trading for a month or less after losing a key person.
- 38% of UK businesses have no business continuity plan of any kind.
- 25% of UK businesses with a continuity plan say it does not cover the health or loss of key people.
- Only 15% of UK business owners rank losing a key person among their top business concerns.
What is key person risk?
Key person risk is the danger that your business loses revenue, stability or value if someone it depends on dies or becomes seriously ill. That person might be you, a co-director, a top salesperson or the only person who knows how a vital system works. If you want the full picture of how cover works, our key person insurance guide explains it.
The risk is easy to underestimate. Only 15% of owners list losing a key person as a top concern, well behind economic downturn (46%) and rising costs (34%). Yet losing one person can hit revenue far faster than a slow economy.
How long could UK businesses keep trading without a key person?
Most businesses would feel the impact within months. 23% of owners say they could last a month or less, and a further 16% say between one and six months. Just 11% think they could keep going for six months to two years.
| How long could you keep trading after losing a key person? | Share of businesses |
|---|---|
| Up to 1 month | 23% |
| 1 to 6 months | 16% |
| 6 to 12 months | 7% |
| 1 to 2 years | 4% |
Source: Scottish Widows Business Protection Research, conducted by YouGov, March 2026 (2,019 GB business owners and senior decision makers). Remaining respondents gave other answers or did not know.
Do most businesses have a continuity plan?
Many do not. 38% of UK businesses have no continuity plan at all, and a further 29% rely on an informal plan that has never been written down. The government's guidance on business continuity planning is a useful starting point if you are building one.
| Business continuity planning | Share of businesses |
|---|---|
| Formal, documented continuity plan | 26% |
| Informal plan, not written down | 29% |
| No continuity plan | 38% |
Source: Scottish Widows Business Protection Research, conducted by YouGov, March 2026 (2,019 GB business owners and senior decision makers).
Do continuity plans cover the loss of key people?
Not always. Of the businesses that do have a continuity plan, 64% say it covers the health or loss of key people, but 25% say it does not and 11% are not sure. A plan that ignores key people misses the risk most businesses carry.
How can you work out your own trading runway?
Your trading runway is your available cash divided by the monthly shortfall you would face without your key person. The shortfall is the profit you would lose, plus any extra costs such as recruitment fees or temporary cover. The worked example below shows how quickly the numbers can tighten.
| Illustrative example | Figure |
|---|---|
| Cash reserves available | £60,000 |
| Monthly gross profit generated by the key person | £20,000 |
| Extra monthly cost of temporary cover or recruitment | £5,000 |
| Monthly shortfall (lost profit + extra cost) | £25,000 |
| Trading runway (£60,000 ÷ £25,000) | 2.4 months |
Source: Illustrative figures only, for a hypothetical business. Your own figures will differ.
Replacing a senior person often takes longer than 2.4 months. Recruitment, notice periods and getting someone up to speed can easily run to six months or more, which is where a funded plan makes the difference.
How does a business fund the gap?
Key person insurance turns an unfunded plan into a funded one. It pays a lump sum to the business if a named person dies or, where included, is diagnosed with a serious illness. The business can use it to cover lost profit, recruit a replacement or reassure lenders. If you are unsure how exposed you are, the wider findings in our business protection statistics for 2026 show how other businesses compare.
The right level of cover depends on your business, your people and your figures. A specialist adviser can help you work through your runway and what it would take to extend it. Executive Life is authorised and regulated by the Financial Conduct Authority.
Frequently asked questions
What is key person risk?
Key person risk is the chance that a business loses revenue, stability or value because someone it depends on dies, falls seriously ill or leaves. 94% of UK business owners say they have at least one key person, according to Scottish Widows research conducted by YouGov in 2026.
How long could most businesses survive without a key person?
Not long. 23% of UK business owners say they could keep trading for a month or less after losing a key person, and a further 16% say one to six months. Only 11% believe they could last between six months and two years.
Should a business continuity plan cover key people?
Yes. A business continuity plan that ignores key people leaves out the risk most businesses are exposed to. Of UK businesses that have a continuity plan, 25% say it does not cover the health or loss of key people and 11% are not sure.
How do I work out my business's trading runway?
Divide your available cash reserves by the monthly shortfall you would face without your key person. The shortfall is the revenue you would lose plus any extra costs, such as recruiting or hiring cover. The result is roughly how many months you could keep trading.
How can a business fund the loss of a key person?
Key person insurance pays a lump sum to the business if a named key person dies or, where included, is diagnosed with a serious illness. The business can use it to replace lost profit, recruit a successor or reassure lenders and customers.
Last reviewed: September 2026. Next review: April 2027. Tax rates and thresholds are subject to change.
Written by
Alex Ogden DipFA | Director | Executive Life
Alex Ogden DipFA holds the Level 4 Diploma for Financial Advisers (DipFA) awarded by the London Institute of Banking and Finance (LIBF), the FCA's benchmark qualification for retail investment advisers. He is authorised by the FCA, Ref: AJO01072 (FCA register).
Executive Life is authorised and regulated by the Financial Conduct Authority. This article is for information purposes only and does not constitute financial advice. Tax treatment depends on individual circumstances and may be subject to change. Always seek professional advice before making financial decisions.