Final answer:
c) Key-person insurance is the coverage that protects a small firm against the death of key personnel, with the company paying the premiums and being the beneficiary.
Step-by-step explanation:
The type of insurance that allows a small firm to protect itself against the death of key personnel is called key-person insurance. This coverage is a life insurance policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums. This kind of insurance is crucial for small firms because the death of a key individual can have a significant negative impact on the company's continuity and financial stability.