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KeyPerson Coverage

• "Key employees" - a criterion used to describe highly compensated officers or owners of companies
• "What corporate purpose could be considered more essential than key person coverage? The business that insures its buildings and machinery and automobiles from every possible hazard can hardly be expected to exercise less care in protecting itself against the loss of it's most vital assets - managerial skill and experience." Tax Court ruling, 1982

To the small corporation, the key person is a valuable asset, often one of the most important assets of the business. They may be responsible for making all the sales, or inventing a process or commodity that makes the company unique; in any event, it is the key person who contributes substantially to the success of the business. A company may be fortunate to have more than one key person; whoever they are, the positions they fill are significant to the profitability of the business. [Next]