Cover protecting an organization against the financial loss caused by the unavailability of a person on whom a significant part of its value depends.
Key person insurance does not cover the person but the financial burden their unavailability places on whoever depends on them. It protects the investment of a business, a sports club or a producer against the failure of an individual whose absence disorganizes the activity or destroys a balance-sheet asset. Underwriting requires the person to be named and, for large sums, a medical selection that excludes known conditions. The insured value is a bet on a trajectory, and the quality of the contract is judged by the definition of unavailability far more than by the headline capital.
A club that paid a transfer fee insures the player as a key person to protect the net book value and residual wages, while the player separately insures their own future income.
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