Typical Key Employees

A key employee is anyone in whom the business is deemed to have an insurable interest, usually based upon a substantial impact on the financial success of a business. Smaller companies tend to have a greater need for key employee insurance since they do not have a pool of employees from which to select a replacement if a key employee dies. Further, the success of a smaller business can be directly attributed to the vital contributions of a few individuals. In general, a key employee can be anyone who—

is responsible for management decisions,
is highly paid,
has a significant impact on sales, or
has a special rapport with customers and creditors.

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