Shareholder Protection
A safety net for the business
What is it?
Share Buyback Insurance. A Life or Critical Illness Policy designed to provide the funds needed to buy back a shareholder’s shares if they die or become seriously ill — helping keep ownership within the existing business.
Who’s it for?
Business owners and shareholders. Particularly useful for limited companies with multiple shareholders, whether you’re co-founders, business partners or investor-directors. It can help make difficult situations more straightforward and reduce the risk of future disputes.
Why does it matter?
Protecting ownership and control. If a shareholder dies or suffers a critical illness, their shares could pass to someone outside the business. Without the right plan in place, this could affect who controls the company.
Who pays?
The business or the shareholders. Depending on how the arrangement is structured, premiums can be paid by the company or individual shareholders. The cover is often set up alongside a cross-option agreement.
What does it cover?
Death or critical illness. If a shareholder dies or is diagnosed with a covered critical illness, the policy can provide a lump sum to help the company or remaining shareholders purchase their shares.
Is it tax-efficient?
Potentially, when structured correctly. The tax treatment depends on the specific arrangement and circumstances, so getting the right advice at the outset is important to make sure the policy is set up appropriately.
