Shareholder Business Protection

Buy back shares in the event of the serious illness, or premature death of a fellow shareholder.

Business Protection

Shareholder Business Protection

Shareholder protection allows the other business shareholders buy back company shares, in the event of the serious illness, or the premature death of a fellow shareholder.

We provide free quotes and advice, with full insurer market comparison.

Business Protection

Shareholder Protection

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:

Business Protection

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.

Business Protection

How Does it work?

A contract entered into between the company and each shareholding Director.

The contract specifies that in the event of a director’s death, the company would acquire the option (to be exercised within a limited period, usually three months, after death) that compels the deceased shareholder's next of kin to sell their shares back to the company at a fair value.

This is referred to as a "Call Option". The company arranges appropriate Life Cover on the relevant shareholder, so that if a shareholder died, funds are available to buy back their shares.

Likewise, the deceased's personal representatives would acquire an option to compel the company to purchase the shares from them at a fair value. This is called a "Put Option".

In this way, Corporate Co‐Director Insurance enables either the company itself (not the surviving Directors) or the deceased’s next of kin to trigger the purchase/sale of the deceased’s shares after death.

In the event of the death of a shareholder covered by such an Option Agreement, the company would use the proceeds of the policy to buy back the deceased’s shares on death and cancel them, or hold them as 'treasury shares'. The surviving shareholders would therefore gain full ownership of the company.

Questions & Answers

Shareholder Business Protection - FAQ's

All you need to know in regards to your shareholder business protection.

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

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.

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.

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

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.

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.

Get in touch

Let's Talk

Schedule your free consultation right now.