Key person insurance is when an insurance policy or policies are taken out to cover the life and/or health of an individual deemed strategic to the interests of the business. Their value is so key to the continued operation of the business that their loss could impair the business fatally!
For example, a salesperson responsible for over 60% of gross revenue. This person could be insured using key person insurance and thus the business could be protected if the key individual becomes disabled or passes away.