What is Key Person Insurance and How Does It Work?

As you scale your small business past your first few million dollars in revenue, your operational success depends heavily on specific individuals. You might have a head of product development who holds proprietary technical knowledge, a lead sales executive who manages seventy percent of your core accounts, or a general manager who coordinates daily operations. If one of these critical individuals passed away unexpectedly, your business would face immediate financial chaos. Key person insurance, historically called key man insurance, is a specialized corporate insurance policy designed to protect your company from the financial disruption caused by the death of a critical team member.