Surviving owners stay in control and minimise disruption to the business

Partner & Shareholder Protection


Help avoid disruption to your business if a colleague were to die.

Shareholder protection allows business owners to buy shares back from a co-shareholder who is diagnosed with a critical or terminal illness or dies. This type of policy helps surviving owners stay in control and minimises disruption to the business.

It involves writing up a series of legal agreements that set out how shares are to be managed. Either the fellow shareholders or the company as a whole takes out insurance policies on the lives of each shareholder. Should a shareholder die, the policy payout can be used to purchase the shares of the deceased holder.

This type of insurance benefits all parties. The business can keep the shares, while the family will receive financial support from the monetary value of the shares.

As with other types of insurance, shareholder protection premiums are based on risk. The monthly amount will depend on a number of factors relevant to the insured person.

Why consider shareholder protection?

If a business owner dies with no share protection in place, their share in the business may be passed onto their family.

This means that the surviving business owners could lose control of a proportion of the business, or in some circumstances, all of it. The family may choose to become involved in the ongoing running of the business or could even sell their share to a competitor.


Losing a valuable shareholder, whether through illness or death, can have a destabilising effect on a company.

Having shareholder protection in place can safeguard your business:

  • Stay in control of the business
  • Prevent the shareholding from being inherited by an unwanted beneficiary
  • Reduce disruption at a challenging time
  • Make an eventual transfer of shares as orderly as possible
  • Avoid costly buy-out capital
  • Greater transparency for the insured person’s beneficiaries

You also have the flexibility of coming to different agreements on how to manage the shares, for example, owners could buy shares back from a shareholder who’s diagnosed with a critical or terminal illness.

How it works

Example case study

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