What is a Key Person?

Answer:
Relating to Business or a Company, a Key Person

is anyone that plays a significant role within that organization. You may say that everyone in an organization plays a significant role but the term Key Person is usually limited to Presidents, CEO's or Owners.

A good way to explain a Key Person is if this person was to pass away unexpectadely would the company be in trouble. Does this Key Person hold important knowledge or relationships that are an integral part to running the company.

Why is important to identify a Key Person within an organization? Insurance companies offer Key Person insurance. In the event the Key Person passes away, the company may need funds to maintain and either hire or train a current employee to overtake the role of the Key Person. Since this can take time and money Key Person Insurance can be a great option.