Share Protection

Share protection is a policy that helps with the cost of shares if a shareholder in your private limited company, member of your Limited Liability Partnership (LLP) or partner in your partnership were to die.

How does share protection work?

This insurance product is most commonly taken out by each shareholder or business owner as an additional part of their Life Insurance and/or Critical Illness policy written in trust for the other business owners. Shareholders also enter into a cross-option agreement and premiums are paid for the business.

What is share protection?

If a business shareholder dies, or is diagnosed with a terminal illness or a critical illness, this insurance product pays out a sum to the remaining business shareholders to help buy the deceased or critically ill business owner’s share of the business.

What triggers a payout?

During the policy term, if one of the agreeing shareholders dies, is diagnosed with a terminal illness (and life expectancy is less than 12 months) or suffers from a specified critical illness agreed in the policy, the other shareholders will receive a sum of money that can help buy that business owner’s share of the business.

What are the benefits of having a share protection?

Financial protection for the business

Shareholder protection insurance ensures you have the financial resources to quickly buy back any outgoing shares and reduce the disruption to your business, without putting its financial future at risk.

Ensure the smooth transition of shares

With shareholder protection in place, there is a legal agreement that the remaining shares will be sold back to other shareholders in the business using the payout from the policy.

Provide peace of mind for all parties

For the deceased shareholder’s family, it provides peace of mind that they’ll receive a fair valuation for the outgoing shares and is one less thing to worry about at a time of personal loss.

Provide clarity over share value

Shareholder protection provides a clear, transparent calculation for the share valuation, so it’s clear what the shares are worth, and what the family will receive.

Retain control of the business quickly

With shareholder protection, this process is much quicker and smoother so the remaining shareholders can get control of the outgoing shares quickly and reduce the disruption caused to the business.


Get The Right Protection For You!