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Financial Services


Integral to corporate succession planning, shareholder protection insurance pays a
lump sum if a shareholder dies or
suffers a critical illness.

RBIG Financial Services Shareholder & Partnership Protection Insurance Solutions

Have you considered what might happen to your business should a shareholder or partner pass away?

To where and to whom would a shareholding pass? 

It's an important question. For example, equity could go to a family member who has no interest or expertise in the business, but has gained a say in its future direction. Alternatively, they could simply seek to realise the maximum value of their inherited shareholding, without regard to the needs or wishes of the remaining shareholders.

Supporting succession planning

Partnership or shareholder protection insurance helps partners, directors and shareholders plan for the unthinkable.

Following the passing of an insured shareholder or partner, it pays a lump sum to enable the remaining shareholders to acquire their stake. This would be structured in conjunction with a cross option agreement. Legally binding, this ensures a remaining shareholder is committed to purchasing the deceased's shareholding for a pre-agreed value.

Not only does this aid business continuity, it can provide a financial lifeline to the deceased's beneficiaries. For both parties, there's no need to wait on probate, with a lump sum - based on an agreed share valuation - paid on settlement to enable a swift and hopefully more emotionally sensitive resolution.

Some shareholder and partnership protection policies also incorporate critical illness insurance. This is structured on the same terms, with a lump sum payable on the diagnosis of any one of a number of insured medical conditions.

RBIG Partnership & Shareholder Protection Insurance solutions

Thanks to our extensive experience of shareholder and partnership protection insurance, you can not only benefit from our expert advice, but the relationships we've nurtured with leading insurers in this specialist field.

We can advise you on how best to structure your cover.

Options available include securing policies for each shareholder, with premiums that take into account individual risk factors, such as lifestyle, age and medical history. This solution may appeal most to small businesses and partnerships where there are just two shareholders. Here, should one shareholder pass, the other receives a lump sum to cover the cost of acquiring their shares

Where more shareholders are involved, it may make sense to arrange cover through a business trust. This structure again sees each shareholder having their own policy, but here the lump sum settlement is distributed equally among the other insured shareholders.

Alternatively, a business can take out a single policy from which it, as a corporate entity, benefits from a claim.

Making the right choice

Working out which option is best, together with calculating the value and fair distribution of benefits, can raise complexities.

Here, our experience can prove invaluable. We will work with you and your accountant to guide you to the most effective and efficient solution offered through our specially selected panel of insurers.

Partnering with your accountants can be important in determining the value of your business and shares. This will need to take into account a number of variables, including the value of net assets, profits and, if dividends have been paid, or will be payable, the yield.

If you trade as a limited company it will also be important to examine your articles of association as these will legally define the shareholder structure and the influence particular shareholders exert over the business.

Professionally crunching the numbers and examining your corporate structure will enable us to arrange an appropriate, accurate level of shareholder protection insurance. Our best solution, in your best interests.

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