A key person usually gets things done; they might be a business partner, director, manager, company secretary, accountant, supervisor or specialist.
Any person whose brains, knowledge, skill or energy converts the tangible assets of the business into income and profit and builds goodwill is a key person.
Their human attributes and qualities inspire confidence, attract custom, and build clientele.
Goodwill enhances the value of the business – it is vital to continued success and improves the credit standing of the business. The confidence and goodwill built up by their skill and efficiency often enhance the credit extended to a business by suppliers and bankers alike. And credit, it is said, is the life-blood a business.
How would the death or disablement of a key person affect the business?
Businesses are not made successful by tangible assets such as land, buildings, plant, equipment, stock or working capital. Rather, success depends upon the ability and brains of the men and women who put these things to work; you need to look after them and insure against the possibility of losing them.