Key Person Insurance
Any company can take out key person insurance on one of their employees. If that employee passes away or is unable to work, the company will receive a benefit from the key person policy.
Key person insurance (previously known as keyman insurance) is used by a business to insure itself against the loss of key personnel including owners or high-level employees who are integral to the success and profitability of the company.
Possible costs of losing a key person:
Loss of revenue generated by the key person.
The cost of sourcing and training new employees.
Disruptions to the management structure.
The existing business debts of the key person.
Loss of important relationships (client, supplier, distributor, etc) that may have been built by the key person.