Business protection is all about insuring for the unexpected. It’s a way of protecting your business if something goes wrong.
Shareholder Protection
Shareholder Protection is a vital element of business protection planning. It doesn’t have a strict legal definition but generally refers to a strategy combining insurance policies and legal agreements to safeguard a business against the financial implications following the death or critical illness of a shareholder. This approach ensures the continuity of business operations by enabling remaining shareholders to purchase the affected shares, supported by the payout from the insurance policy, and simultaneously provides fair compensation to the deceased shareholder’s beneficiaries.
Key Person Insurance
Key person insurance is an important form of business insurance. There is no legal definition for ‘key person insurance’. In general, it can be described as an insurance policy taken out by a business to protect that business for potential financial losses that could arise from the death or extended incapacity of an important member of the business specified on the policy.
Partnership Protection
One of the great risks of a business partnership is that one of the partners may die or suffer a specified critical illness, with his or her share of the business passing to their beneficiaries. The safety net is a pre-arranged scheme to ensure the surviving partners have enough funds to buy out the departed partner’s interest in the business.
Relevant Life Plan
A Relevant Life Plan is a death-in-service benefit taken out by a company on behalf of an employee.