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Key Person Insurance in Delaware

Delaware permits a qualifying employer to insure an employee without notice or consent only when the policy meets the state’s employer-owned definition, including Delaware delivery and an employer incorporated, registered, or qualified there with at least 50 employees. The underlying insurable-interest rule recognizes employers that provide employee benefits, and Delaware law also addresses policy interests when a business is acquired. 1,2

What Is Key Person?

Key person insurance pays the business, not the person’s family, when a founder, partner or employee it relies on dies. Disability, overhead expense and buyout funding are separate products to discuss on their own. Read the national Key person guide.

What to Watch for in Delaware

  • Check the 50-Employee Threshold and Delivery

    Delaware’s no-notice/no-consent exception applies to an employer-owned policy as the code defines it: the employer must be incorporated, registered, or qualified in Delaware, have at least 50 employees, and procure a policy issued for delivery in the state. The statutory definition also covers certain trusts established by that employer, so verify each condition rather than relying on the company’s Delaware formation alone. 1,2

  • Connect the Employer to Employee Benefits

    Delaware gives an employer that provides life, health, disability, retirement, or similar benefits to employees or affiliate employees an insurable interest in those employees’ lives. A qualifying employer may use a trust with the same interest; document the benefit-providing relationship and whether the employer or trust will own the policy. 1

  • Review Coverage After an Acquisition

    When an employer acquires all or part of another employer’s business by purchase, merger, or otherwise, Delaware law automatically conveys the prior employer’s interest to the acquiring employer or its qualifying trust. It also permits an exchange of the existing policy for a replacement policy without establishing a new insurable interest at the exchange, so give the carrier the acquisition and replacement details before changing the policy. 1

  • Confirm Whether the Consent Exception Applies

    Delaware’s default rule requires the insured’s application or written consent for an individual life policy, with exceptions including group life and the narrowly defined employer-owned policy. If your arrangement does not meet that employer-owned definition and is not group life, obtain the insured’s written consent before the contract is made. 1

Who Regulates Insurance in Delaware

Delaware Department of Insurance

The Delaware Department of Insurance licenses and regulates insurers and insurance producers, reviews regulated insurance activity, and handles complaints. Its consumer division can help you raise an insurance concern and its services page links to official license searches. 3,4,5

Surplus-lines tax and stamping office

Reported tax rate: 3% of gross premium, less return premium, when Delaware is the home state When Delaware is the insured’s home state, its 3% surplus-lines premium tax applies to the entire premium of a multistate policy, less returned premiums and excluding federal and state taxes and examination fees. Ask the surplus-lines broker to confirm the home-state determination and tax calculation, and separately explain how exposures are allocated in the required reports; those allocations do not reduce the premium subject to Delaware’s tax. 6,7

Providers With Documented State Licenses

These providers publish a national listing for Key person; the state records document licenses for the entities and roles shown below. Some records rely on company-reported information rather than independent regulator verification. A national listing does not confirm the product is available in Delaware. Check the regulator’s license lookup and confirm state availability for your business when requesting a quote.

  • RiskCubeRiskCube Insurance Services, LLCInsurance producer · checked 2026-09-28RiskCube’s license page, effective February 11, 2026, lists property-and-casualty producer/broker licenses in California and Delaware and names NPN 21694336. The company says it is expanding its licensing footprint; no other states are listed. 13
  • VouchVouch Specialty Insurance Services, LLCInsurance producer, Surplus-lines broker · checked 2026-09-28Vouch’s licenses page, effective January 16, 2025, lists producer licenses in all 50 states and DC. Its separate surplus-lines table includes Idaho number 870820, while a footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses. Because those statements conflict for Idaho, this record keeps Idaho producer-only and does not treat the table number as established agency surplus-lines authority. The page is company-reported and does not establish product availability. 15

Questions to Ask Before You Buy in Delaware

  1. Will the policy be issued for delivery in Delaware, and does the employer or trust meet every part of the state’s 50-employee employer-owned definition?
  2. Which employee-benefit program supports the employer’s interest, and is the policy owner the employer or a trust with the same statutory interest?
  3. If we acquired the business or are replacing its policy, what evidence of the transaction and prior policy should the insurer receive?

Key Person in Delaware: FAQ

Does a Delaware employer need employee consent for key person insurance? 1,2

Sometimes. Delaware waives notice and consent for a qualifying employer-owned policy, which must be issued for delivery in Delaware and procured by an in-state-qualified employer with at least 50 employees; otherwise, an individual policy generally requires written consent unless another statutory exception applies. 1,2

Can a Delaware buyer keep a key person policy after acquiring a business? 1

Yes. Delaware automatically conveys the prior employer’s insurable interest to an employer that acquires all or part of its business, and permits exchange of an existing policy for a replacement without establishing a new interest at the time of exchange. 1

Key Person in Other States

Other Coverage in Delaware

Sources

  1. Delaware Code, Title 18, Chapter 27, Subchapter I. Delaware General Assembly; 18 Del. C. §§ 2704(c)(3), (e)(2)–(3), (f)–(g), 2708(4); code includes acts through May 22, 2026. Accessed 2026-09-28.
  2. Delaware Laws, Volume 69, Chapter 462. Delaware General Assembly; Sections 1, 3–4, employer-owned definition and amendment to 18 Del. C. § 2708(4). Accessed 2026-09-28.
  3. Delaware Department of Insurance. Delaware Department of Insurance; Official Department homepage and regulatory resources. Accessed 2026-09-28.
  4. Services. Delaware Department of Insurance; Department service directory links to the state insurance licensee search. Accessed 2026-09-28.
  5. Consumer Services. Delaware Department of Insurance; Complaint filing and consumer assistance; publishes Consumer Services phone. Accessed 2026-09-28.
  6. Surplus Lines Bulletin 22. Delaware Department of Insurance; Surplus Lines Bulletin 22 (October 2025; printed day is blank), reproducing 18 Del. C. § 1925: home-state tax treatment, all premium on multistate policy if Delaware is home state, 3% rate, and exclusion of federal/state taxes and examination fees from gross premium. Accessed 2026-09-28.
  7. Delaware Code, Title 18, §§1923–1925. Delaware General Assembly; §1923(a)(1),(12) home-state verification and allocation records; §1924(b)(3)–(6) separate premium reporting; §1925(b)–(c) 3% tax, deductions/exclusions and full multistate premium when Delaware is home state. Accessed 2026-09-28.
  8. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  9. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  10. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  11. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  12. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  13. Licenses & Disclosures. RiskCube; Property & Casualty Producer/Broker Licenses; February 11, 2026 version. Accessed 2026-09-16.
  14. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  15. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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