A business may need key person protection because:

A business may need key person protection because:
A . The business relies on the input of an individual
B . It is a very small business
C . It is to cover a very significant customer
D . Its profits are very seasonal

View Answer

Answer: A

Explanation:

Key Person Protection:

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.

Reference: ICWIM Module 5: Focus on business risk management and insurance needs.