Key person insurance is a life or disability insurance policy purchased by a business to protect against financial losses resulting from the death or incapacity of a key employee or executive. This type of insurance helps cover costs such as lost revenue, hiring replacements, or business disruption.
Key person insurance provides financial stability during transitions caused by the loss of critical personnel.
Key person insurance is important because it safeguards businesses from the potential financial impact of losing individuals whose expertise, leadership, or client relationships are vital to operations. It ensures continuity and provides resources to adapt during challenging times.
For stakeholders, key person insurance reinforces confidence in the business’s resilience and planning.
Key person insurance is an essential risk management tool for businesses reliant on individual contributions.
