{"id":8161,"date":"2026-10-30T07:53:05","date_gmt":"2026-10-30T07:53:05","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-construction-company\/"},"modified":"2026-10-30T07:53:13","modified_gmt":"2026-10-30T07:53:13","slug":"key-person-insurance-construction-company","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-construction-company\/","title":{"rendered":"Key Person Insurance for Construction Companies in Florida"},"content":{"rendered":"\n<div class=\"wp-block-cover alignfull is-dark chg-hero\" style=\"min-height:460px;aspect-ratio:unset;\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-background-dim-80 has-background-dim wp-block-cover__gradient-background has-background-gradient\" style=\"background:linear-gradient(90deg,rgba(32,36,46,1) 0%,rgba(32,36,46,1) 55%,rgba(32,36,46,0.7) 100%)\"><\/span><img class=\"wp-block-cover__image-background wp-image-8159\" alt=\"A senior operations manager reviews production schedules and equipment logs at a workstation in a manufacturing facility while colleagues work in the\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32.jpg\" width=\"1376\" height=\"768\" srcset=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32-150x150.jpg 150w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32-300x167.jpg 300w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32-768x429.jpg 768w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32-1024x572.jpg 1024w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-and-photo-32.jpg 1376w\" sizes=\"(max-width: 825px) 825px, 100vw\" fetchpriority=\"high\" decoding=\"async\"\/><div class=\"wp-block-cover__inner-container has-global-padding is-layout-constrained wp-block-cover-is-layout-constrained\">\n<p class=\"chg-eyebrow has-base-color has-text-color wp-block-paragraph\" style=\"text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Florida construction companies | Miami, Fort Lauderdale, Tampa, Orlando<\/p><h1 class=\"wp-block-heading has-base-color has-text-color\" style=\"text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Keep Your Construction Company Steady if a Key Person Is Lost<\/h1><p class=\"has-base-color has-text-color wp-block-paragraph\" style=\"font-size:clamp(0.875rem, 0.875rem + ((1vw - 0.2rem) * 0.625), 1.25rem);text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Key person life insurance can help a Florida construction company manage the financial impact of losing an owner, estimator or project leader. We review it with a CPA&#x27;s view of tax and cash flow.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Call us today<\/a><\/div><div class=\"wp-block-button chg-cta chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today<\/a><\/div><\/div>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:0.85rem;color:#6b7280;margin-bottom:1.5rem\">By Nischay Rawal \u00b7 Published October 30, 2026<\/p>\n\n<article lang=\"en\">\n\n\n<p><a href=\"\/life-insurance-guides\/key-person-insurance\/\">Key person insurance<\/a> for construction company owners is a life insurance policy that the business owns on an essential person. If that person dies, the company receives the death benefit. In construction, the key person is often the owner or estimator whose name sits on bonds, lender files, and client contracts. This page explains how the coverage works, what it can and cannot do, and what to plan before you buy. Insurance is offered by Nischay Rawal, a licensed insurance agent, separately from the firm&#8217;s accounting practice.<\/p>\n<h2>Key Person Insurance for Construction Companies: What It Is and Who It Covers<\/h2>\n<p>Key person insurance is a life policy the business takes out on a key individual. The company is the owner and beneficiary. The <a href=\"https:\/\/www.iii.org\/publication\/insuring-your-business-small-business-owners-guide-to-insurance\/specific-coverages\/life-insurance-for-key-employees\">Insurance Information Institute<\/a> says this coverage compensates a business for financial losses caused by a key employee&#8217;s death or disability.<\/p>\n<p>In a construction firm, people who often qualify as key include:<\/p>\n<ul>\n<li>The principal owner or a co-owner<\/li>\n<li>The estimator who holds the bid history and pricing knowledge<\/li>\n<li>The operations head who runs crews and schedules<\/li>\n<li>The person whose name is on surety bonds, credit lines, and major contracts<\/li>\n<\/ul>\n<p>Florida law sets a rule before the policy can start. The business needs written consent from the key person before it buys coverage on that person&#8217;s life. <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.404.html\">Fla. Stat. \u00a7 627.404<\/a> sets this insurable interest rule. The business also may not retaliate against a key person who says no.<\/p>\n\n<div class=\"cta-dose-mid wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Not sure what your next step is?<\/h3><p class=\"wp-block-paragraph\">Talk it through with our team &#8212; we can walk you through how a situation like yours is usually handled and what your options are.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Schedule a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Schedule a coverage review<\/a><\/div><\/div>\n<\/div>\n\n<figure class=\"wp-block-image size-large has-custom-border\"><img decoding=\"async\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/engineer-in-a-high-visibility-vest-and-hard-hat-inspecting-l-photo.jpg\" alt=\"Engineer in a high-visibility vest and hard hat inspecting large machinery in a factory.\" style=\"border-radius:8px;width:100%;aspect-ratio:16\/9;object-fit:cover\"\/><\/figure>\n<h2>What a Key Person Life Policy Pays For in a Construction Business<\/h2>\n<p>The policy pays the company, and the company decides how to use the money. Owners often plan for four uses:<\/p>\n<ul>\n<li>Covering lost revenue while the company works through a leadership change<\/li>\n<li>Paying for interim management or a replacement hire<\/li>\n<li>Paying down business debt or a construction line of credit<\/li>\n<li>Answering a lender or surety request for financial support<\/li>\n<\/ul>\n<p>Keep these limits in mind. A policy does not replace a contractor&#8217;s license. It does not guarantee any bond or contract. It does not move a project&#8217;s obligations to someone else. Disability coverage is a separate product and should be reviewed on its own terms.<\/p>\n<p>Start with a list of fixed costs, open credit, and projects in progress. That list shows the amount the company may need. It keeps the decision tied to the business&#8217;s cash flow.<\/p>\n<h2>Why Bonding, Contracts, and Lender Relationships Raise the Stakes<\/h2>\n<p>A construction company faces more risk when one person holds its key bonding, bank, and client relationships. The loss of that person can affect several parts of the company at once.<\/p>\n<p>Ask these questions before you buy:<\/p>\n<ul>\n<li>Does any bond or credit agreement name a principal or require notice of a leadership change?<\/li>\n<li>What financial support does the lender expect from the company, and on what timeline?<\/li>\n<li>Does a major contract tie payment or approval to a specific person?<\/li>\n<li>Who can sign and speak for the business during a transition?<\/li>\n<\/ul>\n<p>Take these questions to your surety, your bank, and your attorney. Their answers set the facts that matter. Cash flow often feels the strain first. Payroll, supplier terms, and payment schedules keep running while a new leader gets up to speed. A policy addresses that gap. It does not tell you what a surety or lender will do.<\/p>\n<h2>Term or Whole Life for a Key Person Policy<\/h2>\n<p>Term life covers a set period, while whole life covers the insured for life and builds cash value. Term life often fits a defined risk, such as a project period or a loan term. Whole life often fits a longer need, such as an owner who will stay with the company for many years.<\/p>\n<p>Cash value is the savings part inside a whole life policy. Florida&#8217;s <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">policy loan rule<\/a> applies to policies with a cash surrender value while no premium is in default. Under <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458(1)<\/a>, the loan value of the policy must be at least equal to the cash surrender value at the end of the then-current policy year, although the insurer may deduct certain existing indebtedness from that loan value or from the loan proceeds. The loan value must be at least equal to the cash surrender value at the end of the current policy year, less permitted deductions. Under <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458(1)<\/a>, &#8220;The loan value of the policy shall be at least equal to the cash surrender value at the end of the then-current policy year, except that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value, including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year.&#8221; The insurer may defer a loan for 6 months after application, other than a loan for the payment of any premium to the insurer. The loan rule does not apply to term policies.<\/p>\n<p>How a policy loan or a withdrawal affects the amount paid at death and the policy&#8217;s cash value depends on the terms of your specific whole life insurance policy contract, so it is important to review those terms before taking money out of the policy. Florida law also lets a policy state that it will end and become void once everything owed on it, counting interest due or accrued, reaches or goes above its loan value. The insurer must first mail at least 30 days&#8217; notice to the last known address of the insured or policyowner and of any assignee of record at the insurer&#8217;s home office (<a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458(2)<\/a>). <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458<\/a> reads: &#8220;The loan value of the policy shall be at least equal to the cash surrender value at the end of the then-current policy year, except that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value, including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year.&#8221; Where a policy so provides, it ends when total indebtedness equals or exceeds the loan value, but not until at least 30 days&#8217; notice has been mailed to the last known address of the insured or policyowner (<a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458(2)<\/a>).<\/p>\n<p>Dividends on participating whole life policies are not guaranteed. When an illustration shows growth, guaranteed values and non-guaranteed values appear separately.<\/p>\n<p>Cost depends on age, health and underwriting results, coverage amount, policy type, and how long coverage is needed. This page does not quote premiums.<\/p>\n<h2>Ownership, Beneficiary, and Tax Treatment: A CPA&#8217;s View<\/h2>\n<p>The company usually owns the policy, pays the premiums, and is the beneficiary. The <a href=\"https:\/\/www.irs.gov\/faqs\/interest-dividends-other-types-of-income\/life-insurance-disability-insurance-proceeds\">IRS guidance on life insurance proceeds<\/a> explains the general treatment of death benefits.<\/p>\n<p>Premiums work differently. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">26 U.S.C. \u00a7 264<\/a> says no deduction is allowed for premiums on a life policy if the taxpayer is directly or indirectly a beneficiary. So the company generally cannot deduct premiums when it is the beneficiary.<\/p>\n<p>Two other points matter. First, a policy transferred for value can have its tax-free amount limited. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">26 U.S.C. \u00a7 101<\/a> sets this rule, with exceptions. Second, buy-sell funding can change the result. Ownership and beneficiary changes should be reviewed with your tax and legal advisors together.<\/p>\n<p>Our CPA review covers cash flow and tax treatment. The insurance itself is offered by the licensed agent.<\/p>\n<h2>What to Expect: From Coverage Review to Policy Issue<\/h2>\n<p>A coverage review comes first, then the application, underwriting, and policy issue. Each step has a clear job.<\/p>\n<ol>\n<li><strong>Coverage review.<\/strong> Our team looks at debts, bonding and lender ties, and the key people involved.<\/li>\n<li><strong>Amount and policy type.<\/strong> You compare term and whole life against the company&#8217;s real needs.<\/li>\n<li><strong>Application and health questions.<\/strong> Fully underwritten policies require health questions. Issue and rate may depend on insurability.<\/li>\n<li><strong>Underwriting.<\/strong> The insurer completes underwriting before any policy is issued. Length depends on medical history and the insurer&#8217;s requirements.<\/li>\n<li><strong>Policy delivery.<\/strong> Review the policy and its terms before you rely on it.<\/li>\n<\/ol>\n<p>Plan your timing. If a lender or surety has a deadline, start early, because underwriting takes the time it takes. The key person&#8217;s written consent must come before the purchase, as <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.404.html\">Fla. Stat. \u00a7 627.404<\/a> requires.<\/p>\n\n<div class=\"cta-dose-mid wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Not sure what your next step is?<\/h3><p class=\"wp-block-paragraph\">Talk it through with our team &#8212; we can walk you through how a situation like yours is usually handled and what your options are.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Schedule a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Schedule a coverage review<\/a><\/div><\/div>\n<\/div>\n<h2>How NR CPAs &amp; Business Advisors Approaches This Work<\/h2>\n<p>NR CPAs &amp; Business Advisors is a Miami CPA firm. It helps families, professionals, and business owners across the United States choose and buy life insurance, including key person and buy-sell coverage.<\/p>\n<p>Our approach puts accounting, tax, and cash flow next to the insurance discussion. Insurance is offered by Nischay Rawal, a licensed insurance agent, separately from the firm&#8217;s accounting practice. Florida law requires an agent to make clear that they act as an insurance agent when selling insurance. See <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0626\/Sections\/0626.9531.html\">Fla. Stat. \u00a7 626.9531<\/a>.<\/p>\n<p>We work with owners in Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa, and Jacksonville. We also work with owners across the United States, including Indian-American business owners and NRI owners.<\/p>\n<p>We do not offer rebates or gifts to buy a policy. If a commission applies, we disclose it in writing before we work together. <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0400-0499\/0473\/Sections\/0473.3205.html\">Fla. Stat. \u00a7 473.3205<\/a> requires CPA firms engaged in public accounting that accept a commission for the sale of a product or service to a client to disclose that fact to the client in writing.<\/p>\n\n<figure class=\"wp-block-image size-large has-custom-border\"><img decoding=\"async\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-craftsman-repairs-equipment-at-a-workbench-in-a-bright-spa-photo.jpg\" alt=\"A craftsman repairs equipment at a workbench in a bright, spacious workshop.\" style=\"border-radius:8px;width:100%;aspect-ratio:16\/9;object-fit:cover\"\/><\/figure>\n<h2>Common Questions About Key Person Insurance for Construction Companies<\/h2>\n<p>Choose the person whose loss would cause the largest financial hit.<\/p><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Can the policy pay a bond claim?<\/summary><p class=\"wp-block-paragraph\">The policy pays the company, and the company decides how to use the money. The policy does not change the terms of a bond or contract. Ask your surety and attorney how those terms apply.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>What if the key person leaves instead of dying?<\/summary><p class=\"wp-block-paragraph\">Surrender, ownership transfer, and cash value work differently for each policy. If an agent recommends surrendering a life policy with cash value and does not recommend using the proceeds to fund or purchase another annuity or life insurance policy, Florida law requires written information first. That includes any surrender charge and possible tax consequences, under <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.4553.html\">Fla. Stat. \u00a7 627.4553<\/a>.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Does the company need a buy-sell agreement?<\/summary><p class=\"wp-block-paragraph\">A buy-sell agreement sets who buys an owner&#8217;s interest if that owner dies. Buy-sell agreement insurance can help fund that purchase. Under <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.4553.html\">Fla. Stat. \u00a7 627.4553(1)<\/a>, an agent who recommends surrendering an annuity or life insurance policy with a cash value, without recommending that the surrender proceeds fund another annuity or life insurance policy, must provide written information about that policy before the surrender is executed. This includes, but is not limited to, the estimated surrender charge, any loss of minimum interest rate guarantees, possible tax consequences, any forfeited death benefit, and a description of any other investment performance guarantees being forfeited as a result of the transaction. Key person coverage protects the company&#8217;s losses, so the two can work together.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Can the business borrow against a whole life policy?<\/summary><p class=\"wp-block-paragraph\">Florida&#8217;s policy loan rules apply to whole life policies with a cash surrender value. Term policies fall outside that rule.<\/p><p>If a recent leadership change, a lender&#8217;s request, or a gap in planning has you looking into this now, call us today to set up a coverage review. You can also <a href=\"https:\/\/nrcpas.com\/contact\">contact our team<\/a> online.<\/p><\/details><\/article>\n<footer class=\"disclaimer\"><em>NR CPAs &amp; Business Advisors, LLC, 782 NW 42nd Avenue, Suite 534, Miami, FL 33126. Life insurance is offered by Nischay Rawal, a Florida-licensed life and health insurance agent (license G066337). This page is general information about life insurance, not tax, legal or investment advice, and not an offer of any specific policy. Coverage, premiums and benefits depend on the issuing insurer&#x27;s underwriting and the policy&#x27;s terms. Policy loans and withdrawals reduce cash value and the death benefit and may have tax consequences.<\/em><\/footer>\n\n\n<div class=\"wp-block-group alignfull has-surface-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-583d630a wp-block-group-is-layout-constrained\" style=\"padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n<h2 class=\"wp-block-heading has-text-align-center\">Who key person coverage is often designed for<\/h2>\n<div class=\"wp-block-columns alignwide is-layout-flex wp-container-core-columns-is-layout-f56f613f wp-block-columns-is-layout-flex\"><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Owners and principals<\/h3><p class=\"wp-block-paragraph\">Companies where a founder or majority owner holds the relationships, licenses or decision-making that the business relies on.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Estimators and project leaders<\/h3><p class=\"wp-block-paragraph\">Key employees who price work, manage schedules and keep active jobs on track.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Bonding and lender relationships<\/h3><p class=\"wp-block-paragraph\">Companies whose sureties or lenders may ask how the business would handle the loss of a key individual.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Cash flow planning<\/h3><p class=\"wp-block-paragraph\">Businesses that want to know how a sudden loss would affect payroll, receivables and day-to-day operations.<\/p><\/div><\/div><\/div>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group alignwide has-global-padding is-layout-constrained wp-container-core-group-is-layout-583d630a wp-block-group-is-layout-constrained\" style=\"padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n<h2 class=\"wp-block-heading has-text-align-center\">How we approach key person coverage<\/h2>\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-f56f613f wp-block-columns-is-layout-flex\"><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--document\"><\/span><\/p><h3 class=\"wp-block-heading\">Ownership and beneficiary review<\/h3><p class=\"wp-block-paragraph\">We look at who owns the policy and who is named as beneficiary, because those choices affect how proceeds are treated and used.<\/p><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--chat\"><\/span><\/p><h3 class=\"wp-block-heading\">A coverage review first<\/h3><p class=\"wp-block-paragraph\">Our first meeting is a coverage review, where we look at your key people, debts, bonding needs and cash flow before discussing any policy.<\/p><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--lightbulb\"><\/span><\/p><h3 class=\"wp-block-heading\">Tax and cash flow context<\/h3><p class=\"wp-block-paragraph\">As a CPA firm, we consider how a policy may fit with your company&#x27;s tax position and financial plan.<\/p><\/div><\/div>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Important: coverage is not a change to your contracts<\/h3><p class=\"wp-block-paragraph\">A key person policy pays the company, and the company decides how to use the money. The policy does not change the terms of a bond, loan or construction contract. Review those terms with your surety, lender and attorney.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Call us today<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today<\/a><\/div><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull has-base-color has-primary-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-4d466591 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--primary,#20242e);color:var(--wp--preset--color--base,#ffffff);padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n<h2 class=\"wp-block-heading has-text-align-center has-base-color has-text-color\">Talk with us about key person coverage for your construction company<\/h2>\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-0aa01211 wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Call us today<\/a><\/div><div class=\"wp-block-button chg-cta chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today<\/a><\/div><\/div>\n<\/div>\n\n<h2 class=\"wp-block-heading\">Related practice areas<\/h2><ul class=\"wp-block-list\"><li><a href=\"\/life-insurance-guides\/key-person-insurance\/protect-business-partner-out-of-country\/\">How Do I Protect My Business When My Partner Is Out of the Country for Long Periods?<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-cash-value-business-books\/\">Can a Business Keep Key Person Insurance Cash Value on Its Books? Questions for the CPA<\/a><\/li><\/ul>\n<!-- chg:section-siblings -->\n<nav aria-label=\"More in this section\">\n<h2>More in this section<\/h2>\n<ul><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-consulting-firm-owner\/\">Key Person Insurance for a Consulting Firm Owner: Covering the Client Relationship<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-contestability-period\/\">Key Person Insurance Contestability Period: What It Means for Your Business<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-coverage-review\/\">Key Person Insurance Coverage Review for Florida Business Owners<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-death-benefit-company-or-family\/\">Does a Key Person Death Benefit Go to the Company or the Family?<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-death-benefit-taxable\/\">Is Key Person Life Insurance Death Benefit Taxable to the Business?<\/a><\/li><\/ul>\n<\/nav>\n<!-- \/chg:section-siblings -->","protected":false},"excerpt":{"rendered":"<p>Key person insurance for construction company owners: how a business-owned life policy can support cash flow, bonding and lender ties. Talk with us.<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":16,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"chg_review":"","chg_sendback":"","chg_canonical":"","chg_lang":"","chg_hreflang":"[{\"hreflang\": \"en\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-construction-company\/\"}, {\"hreflang\": \"es\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/es\/seguro-persona-clave\/seguro-persona-clave-constructora\/\"}, {\"hreflang\": \"x-default\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-construction-company\/\"}]","chg_jsonld":"[{\"name\": \"Key Person Insurance for Construction Companies\", \"@type\": [\"Service\", \"FAQPage\"], \"about\": [{\"@type\": \"Thing\", \"name\": \"Life insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Life_insurance\"}, {\"@type\": \"Thing\", \"name\": \"Term life insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Term_life_insurance\"}], \"@context\": \"https:\/\/schema.org\", \"audience\": {\"@type\": \"BusinessAudience\", \"audienceType\": \"Owners, co-owners, and principals of construction companies, general contractors, and subcontractors; family members, partners, and office managers researching on an owner's behalf\"}, \"provider\": {\"@type\": \"Organization\", \"@id\": \"https:\/\/nrcpas.com\/life-insurance-guides\/#organization\", \"name\": \"NR CPAs & Business Advisors\", \"url\": \"https:\/\/nrcpas.com\/\"}, \"speakable\": {\"@type\": \"SpeakableSpecification\", \"cssSelector\": [\"article > p:first-of-type\", \".wp-block-details p\", \"article > h1\"]}, \"areaServed\": [{\"name\": \"Florida\", \"@type\": \"State\"}, {\"name\": \"United States\", \"@type\": \"Country\"}], \"knowsAbout\": [\"Key person insurance\", \"Key man insurance\", \"Business-owned life insurance\", \"Construction company surety bonding\", \"Buy-sell agreements\", \"Term life insurance\", \"Whole life insurance\", \"Business life insurance tax treatment\"], \"description\": \"Explains how a business-owned life insurance policy on an essential owner, principal, or key employee can support a construction company's cash flow, and how bonding, lender, and contract relationships affect that planning. 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The policy does not change the terms of a bond or contract. Ask your surety and attorney how those terms apply.\"}}, {\"@type\": \"Question\", \"name\": \"What if the key person leaves instead of dying?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Surrender, ownership transfer, and cash value work differently for each policy. If an agent recommends surrendering a life policy with cash value and does not recommend using the proceeds to fund or purchase another annuity or life insurance policy, Florida law requires written information first. That includes any surrender charge and possible tax consequences, under Fla. Stat. \u00a7 627.4553.\"}}, {\"@type\": \"Question\", \"name\": \"Does the company need a buy-sell agreement?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"A buy-sell agreement sets who buys an owner's interest if that owner dies. Buy-sell agreement insurance can help fund that purchase. Under Fla. Stat. \u00a7 627.4553(1), an agent who recommends surrendering an annuity or life insurance policy with a cash value, without recommending that the surrender proceeds fund another annuity or life insurance policy, must provide written information about that policy before the surrender is executed. This includes, but is not limited to, the estimated surrender charge, any loss of minimum interest rate guarantees, possible tax consequences, any forfeited death benefit, and a description of any other investment performance guarantees being forfeited as a result of the transaction. Key person coverage protects the company's losses, so the two can work together.\"}}, {\"@type\": \"Question\", \"name\": \"Can the business borrow against a whole life policy?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Florida's policy loan rules apply to whole life policies with a cash surrender value. Term policies fall outside that rule.If a recent leadership change, a lender's request, or a gap in planning has you looking into this now, call us today to set up a coverage review. You can also contact our team online.\"}}]}, {\"@context\": \"https:\/\/schema.org\", \"@type\": \"BreadcrumbList\", \"itemListElement\": [{\"@type\": \"ListItem\", \"position\": 1, \"name\": \"Home\", \"item\": \"https:\/\/nrcpas.com\/life-insurance-guides\/\"}, {\"@type\": \"ListItem\", \"position\": 2, \"name\": \"Key Person Insurance\", \"item\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/\"}, {\"@type\": \"ListItem\", \"position\": 3, \"name\": \"Key Person Insurance for Construction Companies in Florida\", \"item\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-construction-company\/\"}]}]","chg_meta_description":"Key person insurance for construction company owners: how a business-owned life policy can support cash flow, bonding and lender ties. 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