Shareholder Protection

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 die, the remaining shareholders/business owners are able to purchase their share and ensure the continued smooth running of the business.

How would your business respond should one of the owners/shareholders die or be diagnosed with a critical illness? Besides losing the valued input of that person, their share in the business may well be inherited by their family, who could have little or no interest in your business and may even sell that share to a competitor.

Shareholder Protection Insurance

 

With Shareholder Protection, 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. 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 FA 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 Spectrum FA today for a free, no obligation review to find out how easy it could be to protect your business and the shareholders.

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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 covers all the relevant owners in your company to provide peace of mind to them, their families and your business.

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Competitive Premiums

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

Frequently Asked Questions

How does Shareholder Protection work?

Shareholder protection – also known as ownership protection, shareholder 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 in the event of critical illness.

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.

We have access the leading insurance providers and will tailor the cover to match the circumstances of you and your business.

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

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