Business continuity

Shareholder Protection Insurance

Ensure the business can continue without disruption if a shareholder dies or is critically ill — and that surviving shareholders retain control.

What it is

Funding a share buyout when it matters most.

Shareholder protection insurance provides the funds for surviving shareholders to purchase the shares of a shareholder who has died or been diagnosed with a critical illness. Without it, those shares pass to the deceased's estate — potentially giving a family member or beneficiary a significant stake in a business they have no involvement in, with no mechanism for the remaining shareholders to buy them out.

The cover works in tandem with a cross-option agreement — a legal document that gives the surviving shareholders the option to buy the shares, and the deceased's estate the option to sell. Together, they create a clean, funded, and legally sound mechanism for transferring ownership in the worst-case scenario.

Each shareholder takes out a policy on their own life (or on the lives of co-shareholders) for an amount reflecting the value of their shareholding. If the trigger event occurs, the payout provides the liquidity needed to complete the buyout without the business having to find the funds itself.

Who it's for

Essential for any business with multiple shareholders.

If you have business partners or co-shareholders and no funded exit mechanism in your shareholder agreement, shareholder protection should be a priority — regardless of business size.

Limited companies with two or more shareholders who want to protect business continuity

Business partners looking to ensure the surviving partners retain control of the business

Owner-managed businesses where the shares represent significant personal wealth

Companies that want to avoid an unwanted third party (e.g. a deceased shareholder's family) acquiring a stake

Businesses reviewing their shareholder agreements and looking to fund them properly

Why use a broker

Structured correctly, it works seamlessly. Done wrong, it doesn't work at all.

Shareholder protection requires careful coordination between the insurance policy and the underlying shareholder agreement. The policy ownership, trust structure, and trigger definitions must align with the legal documentation — otherwise the payout may not be accessible when needed, or may create an unintended tax liability.

CompanyPMI will help you understand what's needed, source the right policies across the whole market, and work alongside your solicitor to ensure the insurance and shareholder agreement fit together properly. We manage the policies on an ongoing basis and review them as your business valuation changes — at no cost to your business.

Protect the future of your business.

Tell us about your business structure and shareholding and we'll help you put the right protection in place.

Get a quote