Shareholder Protection

Shareholder protection allows the remaining business shareholders buy back shares, in the event of the serious illness, or premature death of a fellow shareholder. This allows the remaining shareholders retain control of the business, while also providing a cash payment to the serious ill shareholder, or the deceased shareholders family.

Co-directors-insurance top-tips
Co-directors-insurance ic-mp

Co-directors-insurance top-tips

  1. Always consult your taxation and legal advisers.
  2. If opting for company-paid protection, ensure that your companies articles of association allow for your company to purchase it’s own shares.


Shareholder Protection

We Make It Simple

At, we are committed to making arranging your business shareholder protection, easier and more affordable and both compare the market and apply discount to guarantee you best value.

By putting adequate shareholder protection insurance in place, you could make sure the business gets the funds to buy back the shares from a seriously ill shareholder, or in the unfortunate event of their premature death, the deceased’s estate. It’s a plan where all parties, clearly benefit:

  • The remaining directors can retain ownership of the company and provide continuity for the business.
  • The seriously ill shareholder, or their estate, get fair value for their share of the business.
  • Using an appropriate agreement, makes sure any transactions are tax efficient.
  • The deceased’s successor is not obliged to become involved in the business.
  • The seriously ill shareholder, or the deceased shareholder’s estate, receive a capital lump sum for the value of the shareholding.


How To Set Up Your Shareholder Protection Insurance

The death or serious illness of a shareholder can have major repercussions for the future of a company. It can cause immediate financial hardship for the remaining shareholders and maybe even loss of control of the company. In essence, the death or serious illness of a shareholder can potentially jeopardise the future of the company and can have major implications for the remaining shareholders. It, therefore, makes sense, to act on getting the right cover in place and below we outline your options:

Personal Shareholder Protection 

Personal Shareholder Protection allows the shareholders of a limited company to provide funds to purchase the share of a deceased or seriously ill shareholder from their personal representatives. The life assurance contracts are affected by the shareholders personally. This ensures the surviving shareholders retain control of their business.

Corporate Shareholder Protection 

Where the company’s constitution allows for the company to be able to buy back its own shares then Corporate Shareholder Protection applies.

This is an arrangement whereby the company agrees with each shareholder to buy back their shares from their personal representatives in the event of serious illness, or death, with the insurance cost being borne by the company. This ensures security for the Company and peace of mind for all shareholders and their family/dependents.

Shareholder Protection – FAQ

How do I value the company shares?

This is best done with the help of your accountant prior to obtaining your quotes.

How do we make this a legal agreement?

You will need to record the fact in a board resolution that you are putting shareholder protection insurance in place. We can provide with a full report on how to set it up, including sample legal agreements. We also recommend once ready, that you run it by your solicitor.

Should I include Serious Illness Cover, as well as life cover?

A shareholder becoming seriously ill, could have the same negative impact on the company. Including this cover alongside life insurance, means that the reaming shareholders would have the option of buying out the seriously ill shareholder allowing the remaining shareholders more control.

Does offer discount on this plan?

Yes, discount the cheapest standard market premiums by up to 17.5%.

Will I have to do a medical?

Dependent on your age and the level of cover, or an existing medical condition, the insurance company may write to your GP for a medical report and in some, but few cases also ask for a medical exam. If such medical information is required, there is no cost to you and you well are informed immediately.

I have an existing medical condition will this affect the price?

It really depends on the condition and its severity and whether you have more than one medical condition. Every application is individual, so we recommend calling us to discuss any such concerns, in advance of running your quote.