Shareholders 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.

Even though it’s widely used throughout the business world, not everyone has a thorough understanding of what it is, how it works and what the benefits are. So here’s a quick refresher guide.

What is shareholder protection insurance?

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. It involves writing up a series of legal agreements that set out how shares are to be managed if a stakeholder passes away. 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.