Keyman insurance and shareholder protection – vital financial lifelines should the worst happen to your business
It’s a sobering thought but, according to recent research, almost half of uninsured UK businesses would go under if a key person were to die or become critically ill. And even if the business survives, if the deceased is an owner or large shareholder, the effect of their loss can be massively destabilizing. Their shares will likely pass to the family who may want to assert control, or to sell their stake to unknown investors.
So insuring against the loss of a key person is a vital part of any company’s business protection plan. And it’s particularly important for SMEs, where the impact of the loss of one member of staff could be exponentially more damaging.
But worryingly the two types of insurance that cover the death of a key person or shareholder, are often overlooked, with many businesses unaware of them, or their importance.
"At Graham Carter & Co. we’ve over 50 years’ experience helping businesses of all kinds protect themselves against the unknown."
Keyman insurance is a policy taken out to cover vital members of your company's staff, paying out a fixed sum in the event of their death or critical illness. It’s designed to give the business breathing room should the worst happen, covering lost profits and disruption while your business finds its footing again.
Shareholder protection is a seperate policy taken out that pays cash to the remaining shareholders in the event of a large shareholder’s death, allowing them to buy the deceased’s shares back and retain ownership and control of the business.
Both are vitally important guards against the worst happening. For example, in 2017 Over 80 percent of business that had no keyman insurance or shareholder protection in place, and subsequently failed because of a death, said that these two types of insurance would have been lifesavers.
At Graham Carter & Co. we’ve over 50 years’ experience helping businesses of all kinds protect themselves against the unknown. We know that businesses are as unique as the people who run them, so we’ll look carefully at your situation and your needs before sourcing an appropriate, cost-effective plan and then implementing it with the minimum of fuss.
We’ll help make sure that, if the worst should happen, your business is best placed to ride out the storm.