A key person is someone whose role is considered critical to a business – usually because of their specialist knowledge, experience, or influence. If they were to leave, retire, or become unable to work, the business could face serious disruption.
In legal or financial terms, you’ll often hear the phrase when lenders, insurers, or investors assess the risk tied to one individual. For example, if a business depends heavily on its founder or lead negotiator, that person might be seen as a 'key person' in contracts or funding agreements.
Some companies also take out key person insurance to help protect against that risk, giving them a financial buffer if something unexpected happens. While it’s not a legal title, it does often comes with legal and financial implications.
At GloverPriest, we understand navigating the law can be a difficult task to take on alone. That’s why we created this comprehensive guide to help promote information for everyone to use.
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