As a small business how can you deal with the situation of having a key worker on long term sick leave

[2ndhandrose]

[cassa333]

Possibley use a temrary contract such as those used for maternity leave.

Depending on contract terms long term sick can be unpaid therefore there wouldn't/shouldn't be too much more in pay costs...

[buildersmate]

Not quite sure what you are asking. Absence of a key worker to a smaller business is an issue because the skills' loss is proportionately greater (compared to a bigger business). Presumably this is a valued employee who has fallen on unfortunate times but that you expect them to make a full recovery?
The obvious things you have surely thought through:
Can they do some of the work from wherever they are currently stuck?
Can someone else go around to that place to do the work, under instruction/supervision from that person?
Can you get a Temp with the skills in, albeit at a hit on cost to the business?

[Androcles]

This situation is always a good argument for considering key employee insurance. You do not have much choice but to get a temp version either internally or from external sources and take the hit!