This insurance protects a business against financial loss if a critical employee (e.g., founder, CEO) becomes incapacitated or dies.
It is designed to mitigate reliance on essential individuals whose absence would disrupt operations.
Elimination of Other Options:
B: Size of the business is not the determining factor.
C: Significant customers are protected under other insurance (e.g., credit insurance).
D: Seasonal profits do not relate to key person risk.
References:
ICWIM Module 5: Focus on business risk management and insurance needs.
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