As a business owner, in addition to your personal insurance needs, you may be faced with unforeseen business risks. Business assurance arrangements are designed to help you reduce these risks and ensure correctly structured succession planning in your business. There are four core business assurance structures to help you address these risks:

Have you considered the consequences of what will happen if one of your co-shareholders/partners dies?

In the absence of a correctly structured succession plan, the deceased’s shareholding will likely be inherited by one of their family members resulting in a spouse or child becoming an active co-shareholder in your business. A buy-and-sell arrangement can prevent this eventuality by ensuring that you (and any other remaining shareholders) retain control of the business.

Shareholders typically inject capital into to their business effectively creating a credit loan, which is owed by the business to its shareholder. If such a shareholder dies, their executor will claim against the business for settlement of the full, outstanding loan amount. If the business does not have sufficient liquidity (cash) to settle the claim, it could result in the sale of business assets or even bankruptcy. Shareholder’s loan account cover can provide your business with the necessary funds to repay debts owed to shareholders.