In plain English
If a business owner dies or becomes critically ill, their share of the business usually passes to their family. This cover pays out so the remaining owners have the money to buy those shares at a fair price. The family gets cash instead of a stake in a business they may not want, and the remaining owners stay in control.
You own a limited company or partnership with other people and want a plan for what happens if one of you dies or becomes seriously ill.
The legal agreement that sits alongside the policy, how to value the business, and who should pay the premiums.
The details
Losing an owner can have a huge impact on the day-to-day running of a business and can quickly result in financial difficulties. Boardroom confusion can lead to conflict in decision making, as the surviving owners and the deceased’s family may have very different ideas about the future of the business.
Other potential problems include:
- If the shares are sold on the open market, a new owner could take control of the day-to-day running of the business. That new owner could be a competitor or completely unsuitable for the business.
- If the deceased owner’s family are willing to sell the shares, the surviving owners could have trouble raising the finances, and disagreements over the terms of the sale could lead to further difficulties.
- Uncertainty over ownership may cause banks and investors to restructure or cancel funding.
Questions people ask us
Which type do I need?
Do we need a legal agreement too?
How much cover do we need?
How it works
- Drop us a message
- Have a proper chat
- We keep looking after you