What type of policy pays benefits to a business owner if an essential manager becomes disabled?

Key person disability income insurance is designed specifically to provide financial support to a business in the event that a key employee or essential manager becomes disabled and unable to work. This type of policy offers income replacement for the business, compensating for the loss of revenue and helping to cover the ongoing operational costs while the key person is unable to fulfill their role.

This insurance is crucial for businesses that rely heavily on the skills and expertise of specific individuals. Without this coverage, a business could face significant financial strain, particularly if the disabled manager is integral to its operations. By having key person disability income insurance in place, business owners can ensure that they have the necessary resources to maintain stability and continuity during periods of disability.

In contrast, options like key person life insurance provide a death benefit rather than ongoing income support during a disability. Business overhead expense insurance would help cover fixed expenses rather than directly compensating for the income lost due to the manager's inability to work. General liability insurance, on the other hand, pertains to legal claims against a business and does not relate to disability income. Therefore, the specific function of key person disability income insurance makes it the correct choice for this scenario.