Who do business owners typically have an insurable interest in?

Business owners typically have an insurable interest in key employees because these individuals play crucial roles within the organization that significantly impact its operations and profitability. The loss of a key employee can result in financial hardship for the business, making it essential for the owners to protect against such a loss through insurance. This type of coverage is often referred to as key person insurance, which allows the business to recover financially in the event of the death or disability of an employee whose contributions are vital to the company's success.

Key employees usually have specialized skills, critical relationships, or proprietary knowledge that would be difficult to replace quickly. Thus, the insurable interest in key staff members is rooted in the financial stake and reliance the business owner has on these key individuals for the smooth functioning and future success of the business.