Here are some examples from advisors of how key person coverage has been applied:

> Key person insurance coverage was purchased for a charity’s executive director after the charity’s board of directors estimated there would be a significant drop in charitable donations if the person died.

> A vice president who was starting a new venture for his company was covered by key person insurance after his employer said that if the vice president were to die, a lot of knowledge would go down the drain.

> A company that sent three expert engineers to a dangerous part of Africa insured them with key person coverage in case they were kidnapped and killed.

> In a unique application of key person coverage, a company took out a policy on an expert witness whom it thought was key to defending successfully a multimillion-dollar lawsuit against it. If the witness had died, the company said, the case would be lost and the company would have had to pay damages.

— STEWART LEWIS