Shareholder Protection Insurance | Spectrum Financial Advice

Shareholder Protection Insurance

Shareholder Protection – also known as Director Share Protection, Partnership Protection or Ownership Protection – is a means of ensuring that, should one shareholder/partner in a business (either in a Private / Public Limited Company or a Partnership, including, Limited Liability Partnership – LLP) die, the remaining shareholders/business owners are able to purchase their share and ensure business stability and continuity.

When running a business financial security is key and with Shareholder Protection Insurance, you will be able to insure your company against such a situation, by providing a lump sum payment that will allow the remaining business owners to purchase the deceased shareholder’s stake in the business. This allows remaining owners to retain control of the business.

Policies can also include critical illness protection, allowing any owner diagnosed with a critical illness to immediately sell their share of the business to the remaining business owners, without the stress of the other owners having to raise the financial capital.

Spectrum Financial Advice have worked with many shareholders and business owners and have helped them protect their business against the risks that a sudden death or critical illness diagnosis would have caused. We have access to the leading insurance providers and will recommend suitable policies, based on the needs of you and your business.

Contact us today for a fee-free, no obligation review to find out how easy it could be to protect your business and the shareholders.

Please also look at our frequently asked questions (FAQs) towards the end of the page.

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Flexible Cover

Spectrum FA will advise on a range of policy options to ensure you receive cover tailored to the circumstances of your businesses shareholders.

Peace of Mind

Spectrum FA will ensure your Shareholder Protection Insurance covers all the relevant owners in your company to provide peace of mind to them, their families and your business.

Competitive Premiums

Spectrum FA have access to the leading Insurers and are able to obtain competitive premiums for the level of cover you require.

We look at all our providers 

We have access to the leading insurance providers in the market, which allows us to recommend the most suitable policies based on your individual circumstances.

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FAQs

View some of our frequently asked questions that some of our customers have asked.

How does Shareholder Protection work?

Shareholder Protection – also known as ownership protection, partnership protection or director share protection – is a type of insurance policy that ensures, should one owner of a business die, there is money available to enable to remaining business owners to purchase their share of the business. Provision can also be made for a pay-out in the event of critical illness, if this option is suitable for the business.

We will also advise on and arrange for the policies to be placed in a suitable trust, free of charge, as part of our service.

Who pays for Shareholder Protection?

The premiums are usually paid for by your business, but please contact us for further guidance on this.

Why do I need Shareholder Protection?

If your business is owned by more than one owner, then it’s vital you consider Shareholder Protection Insurance to safeguard your company against the death or critical illness of one of the business owners. Without Shareholder Protection the usual course of action is for an individual’s share of a business to pass to their relatives or other beneficiaries on death. When this happens, the beneficiaries have two options; either take over the deceased’s position as an owner, or realise the value of the interest by selling it. Unfortunately, neither option is without its problems.

Often, the family members or other beneficiaries have little or no prior association with your business; they may know little about what you do and nothing of how you work. Additionally their commercial experience or a multitude of other reasons could diminish their capability of fulfilling the role to the same standards as the deceased business owner, causing difficulties and frustration for the remaining owners.

Should the beneficiaries wish to sell the interest to release the capital, you, as the remaining owners, may have very little influence over how the shares are sold. Even if your business is consulted, there may be difficulties in finding an appropriate buyer, which could lead to financial problems for both the family and your business, or you could find yourself working with an unwelcome new owner.

With Shareholder Protection or Director Share Protection, however, all of these worries are alleviated. The policy will ensure that, should one of the business owners become critically ill or die, the capital is instantly provided in a lump sum payment. This will enable the remaining business owners to purchase the share of the business from the critically ill owner or from their beneficiaries, allowing you to maintain full control and ownership of the business.

How can Spectrum FA help with Shareholder Protection?

Spectrum FA have years of experience as specialist business protection advisors and have arranged Shareholder Protection Insurance for many different types of business. We will recommend suitable policies that will protect the future of your business from being disrupted by the unfortunate events such as death or critical illness.

Being independent, we have access to the leading insurance providers in the market, at competitive premiums. We provide expert regulated advice and will tailor the cover to match the circumstances of you and your business.

We do not charge you a fee for our advice or service and you will speak directly to an expert who will guide you through the process and handle all the paperwork on your behalf.

To find out more about Shareholder Protection via Spectrum FA, please get in touch with us today and arrange a fee-free, no obligation review. You can contact us by completing the contact form on the website, by emailing info@spectrumfa.co.uk, and one of our advisors will get back to you as soon as possible or by phoning us on 01279 315 013.

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