What is Shareholder Protection Insurance?
Regardless of the industry you operate in, it’s critical to ensure that you protect your business with a safety net. After all, it represents not only the livelihood of you and your family, but also that of your employees and fellow stakeholders.
One of the most damaging events a business can fall victim to is the death of a major stakeholder. Should a business owner die unexpectedly the event can have a serious impact on their enterprise, not to mention the shareholder’s family. When it comes to distributing shares, family members and other beneficiaries may prefer to cash them in. Meanwhile other shareholders may wish to purchase the shares but may not have adequate funds at their disposal. This is where shareholder protection insurance comes in extremely useful.
Put simply, shareholder protection insurance is designed to ensure that the aftermath of a shareholder’s death is a smooth and stress free as possible. Either the fellow shareholders or the company as a whole takes out insurance policies on the lives of each shareholder. Should a shareholder die, policy pay-outs can be used to purchase the shares of the deceased holder.
By taking out shareholder protection insurance, shareholders enjoy the total peace of mind that should a fellow investor pass away, surviving shareholders will not have to worry about finding the money to purchase assets.
As well as supporting fellow shareholders and family members in the case of death, shareholder protection insurance can also be used to cover serious illnesses. Given that the right agreements and policies have been put in place, a sick shareholder is able to sell shares to continuing shareholders. Should a shareholder fall ill, the knowledge that they have shareholder protection insurance will be a big weight off their minds.
From small scale two-person enterprises to multi-national corporations, shareholder protection insurance is a must have policy for any savvy company. As well as ensuring the stability and longevity of the business, policies also offer the peace of mind that fellow stakeholders and family members will be looked after if the worst happens.
If you would like further information please contact Scott Robinson on 01548 856444 or e-mail: Scott@sabrefinancial.co.uk
By Sabre Financial | Thursday, September 01, 2016