Regardless of the industry you operate in, it’s critical to ensure that you protect your business with a safety net. After all, it represents not only the livelihood of you and your family, but also that of your employees and fellow stakeholders.

One of the most damaging events a business can fall victim to is the death of a major shareholder.  Should a shareholder die unexpectedly the event can have a serious impact on their enterprise, not to mention the shareholder’s family.

When it comes to distributing shares, family members and other beneficiaries may prefer to cash them in. Meanwhile other shareholders may wish to purchase the shares but may not have adequate funds at their disposal. This is where shareholder protection insurance comes in extremely useful.

What is Shareholder Protection insurance?

Put simply, shareholder protection insurance is designed to ensure that in the aftermath of a shareholder’s death, their shares in the business are distributed in a smooth and stress free way.

It involves writing up a series of legal agreements that set out how shares are to be managed if a shareholder dies.

Either the fellow shareholders or the company as a whole takes out insurance policies on the lives of each shareholder. Should a shareholder die, policy pay-outs can be used to purchase the shares of the deceased holder.

The potential benefits of shareholder protection insurance:

  • Help ensure that the remaining business owners retain control of their business.
  • Help ensure that the estate of the deceased owner, or the outgoing critically/seriously ill owner, gets fair value for selling their business share.

As well as supporting fellow shareholders and family members in the case of death, shareholder protection insurance can also be used to cover serious illnesses. Given that the right agreements and policies have been put in place, a sick shareholder is able to sell shares to continuing shareholders. Should a shareholder fall ill, the knowledge that they have shareholder protection insurance will be a big weight off their minds.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

We will charge a broker fee of between £195 and £495 for Residential and Buy to Let mortgages, payable on application. The amount we will charge is dependent on the amount of research and administration that is required.

Stuart Robertson t/a S A Robertson Lifestyle Protection and Mortgages is an Appointed Representative of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority. (FRN: 435779)

Solicitors, Conveyancer and Surveyor Services, Commercial Mortgages, Wills, Trusts, Estate Planning and are not regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let mortgages and bridging finance.