What type of insurance provides coverage if a partner of the company dies or becomes incapacitated?

Key man insurance is a specific type of life insurance designed to provide financial protection for a business in the event that a key employee or partner dies or becomes incapacitated. This coverage helps the business manage the financial impact of losing someone critical to its operations, allowing it to remain stable and continue functioning during a transition period. The death benefit from the policy can be used to cover operational costs, find and train a replacement, or fulfill any financial obligations that may arise from the loss.

The other types of insurance listed serve different purposes. Builder's risk insurance, for instance, specifically protects against damages or losses related to construction projects, while burglary and theft insurance guard against losses due to criminal activities. Gap insurance, on the other hand, often relates to auto financing, covering the difference between what you owe on a loan and the car's actual cash value. Thus, key man insurance stands out as the most relevant option for protecting a business against the unforeseen loss of a vital partner or employee.