As a business owner you must be aware of the problems that can be caused by the death or illness of a Director, business Partner or Key Person. Apart from the emotional loss, there is the likely financial loss. Plan in advance. Protect your business. Ensure that the surviving Partner or Director has the funds to purchase the deceased share without having to borrow to do so.
There are three distinct types of business protection:
Where two or more people are working together in a trade or profession, partnership insurance makes funds available to provide financial compensation to the successor and the estate of a partner who may have died or had a serious illness and is no longer part of the partnership. The funds ensure that there are no negative financial consequences for the partnership, it will help maintain positive relationships both in running the partnership and also with the partners’ estate and successors, in that they are compensated for the deceased partners share of the business. If a partner or key executive were unable to work due to illness or injury, will they continue to be paid? Can the company afford to pay the person who is ill and a perhaps a replacement person? HD Financial Services can find the right solution for your partnership.
Co-Directors Business Cover
This cover is used to provide funds to a company, which is a separate legal entity and its Directors to purchase shares from a successor in the event of the death or serious illness of a Director.
It is a vital insurance in managing any sudden transfer of ownership between Directors, it makes sure that shares in the company can be owned and controlled by the remaining Directors of the company.
The insurance cover delivers funds to the surviving Directors, these funds can be used to purchase any inherited shares from the Directors successors. It helps to avoid a situation that could arise of the remaining Directors losing control of the company. HD Financial Services can find the right solution for your company.
Keyperson insurances is designed to provide cover for employees who are considered key to the ongoing financial success of a company, they can be someone who drives sales, could be a guarantor on a loan, someone who is at the centre of everything in the business. This type of cover is used when Companies need to ensure that they are protected from the risk of financial loss due to losing the best, most important, most influential person in the company because of death or serious illness. Keyperson cover ensures that the company will remain financially stable. HD Financial Services can find the right solution for your company.
Consider these questions when looking to protect your business:
- Would your family take over your share of the business and would the remaining partners/shareholders have the funds needed to buy back your portion of the business from your family?
- How would you feel about a family member of the deceased joining the business?
- Has a formal agreement been put in place? Will your family get a fair price?