Losing an owner can have a huge impact on the day-to-day running of a business, and can quickly result in financial difficulties. Boardroom confusion can lead to conflict in decision making, as the surviving owners and the deceased’s family may have very different ideas about the future of the business. Shareholder or Partnership Protection, sometimes referred to as “Owner’s Insurance” can help business owners keep control of the company if one of them dies or is diagnosed with a critical illness. Our consultants are here to help guide you through the different options available to ensure you have the right policy for your business.
Share Protection is for limited companies and Partnership Protection is for partnerships and limited liability partnerships.
Each shareholder or partner can take out a plan on their own life which is written in trust for the other business owners. Each shareholder or partner signs a cross option agreement. The remaining partners use the money paid under the claim to buy the shares.
If there are only two or three owners of the business, the business can take out a life-of-another plan on each of the lives of the owners, which is written in trust. The owners also sign a cross option agreement. The claim is then paid to the remaining business owners (via the trustees).