Share Purchase Insurance
Dealing with ownership in a company can be difficult in the event of an untimely death or illness. A shareholder arrangement sets out how the shares should be valued and gives the surviving shareholders the right to buy the shares, or the outgoing shareholder the right to sell.
How do I choose the right cover?
Each individual shareholder can take out separate cover for themselves. This insures them for a sum assured equivalent to the value of their company shares. You may also need your shareholding clients to enter into an explicit agreement that if one of them dies, the remaining shareholders can buy their shares from their personal representatives.
What Does Share Purchase Insurance Cover?
Your company would take out a policy for each of the shareholders, with the policy for each person matching the value of their shares. In the event of a shareholder’s death, it is the company that receives the pay-out, which can then be used to purchase the shares and retain control.