James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called what?

The type of disability coverage that James has purchased is called key employee coverage. This policy is specifically designed to protect a business from the financial impact that could arise if a critical employee becomes disabled and is unable to work. It focuses on covering the costs associated with hiring a replacement for that employee, whether temporarily or permanently.

Key employee coverage recognizes the value of individuals who play a crucial role in the success of a business, often impacting overall productivity and revenue. This form of insurance helps ensure that a business can continue to operate effectively by providing the necessary funds to find and train a replacement, thereby minimizing the disruption caused by the employee's absence.

Business property insurance, occupational accident insurance, and general liability coverage serve different purposes. Business property insurance protects physical assets, occupational accident insurance generally covers injuries to employees, and general liability coverage protects against claims of bodily injury or property damage caused by the business. None of these alternatives focus specifically on the financial ramifications of losing a key employee due to disability, making key employee coverage the correct choice in this scenario.