Who would own your business if a shareholder dies? Would the other shareholding directors buy the shares? Could the surviving shareholders stay in control of the company?
Shareholder protection insurance safeguards the ownership of a business against death or illness of one of the controlling shareholders.
Speak to an Assured Life Adviser today to make sure all shareholding and ownership risks are covered. It’s important that a well-defined business protection plan is put in place immediately.
What is Shareholder Protection Insurance?
This insurance protects the surviving shareholders after the death, illness or sudden departure of another.
Each controlling shareholding director takes out a policy in their own name to cover the value of their shares.
Together, these policies form an ownership protection plan for the business.
If a controlling shareholder dies or leaves through illness, the policy pays out to individual shareholders.
What does it protect me against?
Shareholder protection insurance gives surviving shareholders the finance to buy shares, retain ownership and continue growing the business. It protects against losing the shares which would otherwise pass to the family.
With protection in place, directors can buy the shares and keep the business in their control.
Why do I need shareholder or ownership protection?
Shareholder and ownership protection are essential to the future of a business.
Consider what would happen to the former shareholder’s shares without insurance in place.
Surviving shareholders would lose control as the former director’s shares pass to the family. What the family want is the cash value of the shares and they would seek a quick sale.
When the shareholders’ policies pay out, the surviving shareholders can buy the family’s shares and continue to own and control the business.
How do I set up the right protection?
We’ll work with you to identify the controlling shareholders and the correct value of each shareholding. This needs to be set out in a legal document which clarifies how the company’s shares should be valued. For this, we work with you, your shareholders, your legal adviser and accountant to put the right shareholder protection plan in place.
Each shareholder will retain the right to buy or sell shares. The shareholder protection policy will provide the funds to keep ownership among the surviving shareholders so they can continue to operate the business.
How would I make a claim?
Each insurance company will have its own claims processes, which will be clearly signposted throughout your policy documentation. Assured Life Advisers will happily help you if we are able to do so, should you require assistance at all.
Pick up the phone and talk to an Assured Life Adviser if your situation changes and whenever you need advice about your company’s shareholdings and ownership. We’re here to support you in protecting the future of your business.
Get in touch
It’s important to discuss your company’s ownership and protection with the right specialist. Speak to an Assured Life Adviser today.