Key-Man Insurance Definition:

Somewhere, in beneath the trees of the Wilmington, North Carolina courthouse, circa 2007, Justice Rich Leonard rendered the court's decision in, well, In re Beneath The Trees, a bankruptcy case as Justice Leonard sat on the bench of the United States Bankruptcy Court:

"Key man insurance ... is to protect a business upon the death of an executive or key member."

In Augustine, Justice Cumming of the Superior Court of Justice of Ontario of used these words:

"So-called key man insurance was put in place whereby each of (the partners) held a $1 million life insurance policy upon the life of the other, to facilitate the purchase of the deceased’s shares in the event of an untimely death of one partner."

REFERENCES:

• Augustine v. MacMorine, 2004 CanLII 48687
• In re Beneath The Trees, 377 BR 151