William runs a successful chemical manufacturing company, XYZ Manufacturing, which employs a certified industrial chemist, Karl, who is critical to the business' core activities. William would like to insure against Karl's departure due to illness, disability or death. Karl's loss would have a significant impact on the business, resulting in temporary replacement costs, recruitment costs and possibly additional training for a replacement. Your task

Discuss the options William has to secure his business against the loss his business would suffer if Karl were to depart in the circumstances described

  Advise William of the tax situation of any premiums that may need to be paid and payments received. You will need to include the reasoning for your decision based on tax law.