By: Gina Schenk & Tara Manis from Western & Southern LifeThe untimely death of a key person (an employee who is vital to a business or organization) can happen at any time — and without warning. Key person insurance, which is owned by the company, is designed to provide a shot of liquidity to your business to help it weather the financial storm caused by the unexpected loss of someone whose role is vital to managing the company’s day-to-day financial priorities. Key person insurance can also enable the company to purchase any ownership interest the deceased key person may have had from the estate. But this would generally require having a buy-sell agreement in place, a contract that can also help you deal with other kinds of wayward elephants. For example, if you and a business partner have a falling-out — and your partner wants to leave — the buy-sell agreement would dictate how you could buy out your soon-to-be-former partner’s equity stake. It doesn’t cost anything to create a buy-sell agreement (aside from possible legal fees), so it makes sense to put one in place as soon as you divide your ownership of the business.