For a sole-founder business, the calculation is more nuanced than for a multi-partner business because the founder's death or disability typically means the business itself cannot continue without significant restructuring. Common approaches the business and its accountant will discuss include: (1) revenue replacement — multiplying the founder's annual salary or drawings by 3 to 5 years to give a runway for orderly wind-up or sale; (2) goodwill replacement — estimating what a willing buyer would pay for the business if the founder were still operational, since that goodwill typically evaporates without the founder; (3) debt protection — outstanding business loans, equipment finance, lease commitments, and personal guarantees the founder has signed for; (4) employee redundancy — salaries and accrued entitlements that would need to be paid out if the business closes; (5) tax and CGT exposure on any forced disposal of business assets. The sum should be reviewed annually as the business grows or contracts. For a sole founder, the policy is typically held by the business with the business as beneficiary (or held by the founder personally with their estate or a trust as beneficiary, depending on succession planning). This is a structural decision worth working through with the business's accountant and a licensed insurance adviser before applying — the right structure depends on how the founder intends the business to be wound down or transferred at death.