Which type of insurance is specifically designed to cover the loss of a key employee?

Key man insurance is a type of life insurance designed specifically to cover the loss of a key employee, such as a business owner or an executive who plays a crucial role in the company's success. This insurance provides financial support to a business in the event of the untimely death or disability of the key individual, as their absence could significantly impact the company's operations and profitability. The funds from the policy can be used to cover lost revenue, hire a replacement, or manage the transition period.

In contrast, workers' compensation insurance focuses on providing benefits to employees who are injured at work, while liability insurance protects against claims for damages caused by the business to others. Health insurance provides medical coverage for employees but does not specifically address the financial challenges associated with losing a key employee. Therefore, key man insurance is the most appropriate type of insurance for this scenario.