Business Insurance Broker Service in Tunbridge Wells

This is a type of insurance that helps protect the ownership interests of shareholders in a company in the event of the death or critical illness of one of the shareholders. It is often used in Ltd companies or partnerships where the loss of a key shareholder could have significant financial implications for the business.

Here's how it typically works:

Policy Setup: The company takes out an insurance policy on the lives of its shareholders. Each shareholder is insured for an amount that reflects the value of their shareholding in the company.

Trigger Events: If a shareholder dies or becomes critically ill, the insurance policy pays out a lump sum to the surviving shareholders or to the deceased shareholder's estate.

Buyout Agreement: Alongside the insurance policy, shareholders typically put in place a buyout agreement or cross-option agreement. This agreement outlines the terms under which the surviving shareholders can buy the deceased shareholder's shares. The insurance payout can then be used to facilitate the purchase of the deceased shareholder's shares from their estate.

Continuity: Shareholder protection insurance helps to ensure business continuity by providing funds for the surviving shareholders to purchase the deceased shareholder's shares. This can prevent disputes over ownership and control of the company and enable the business to continue operating smoothly.

Overall, shareholder protection insurance provides peace of mind for shareholders and helps to protect the financial interests of both the business and the individual shareholders in the event of unforeseen circumstances.

Keyman insurance, also known as key person insurance, is a type of life insurance policy taken out by a business on the life of a key employee or employees whose contributions are crucial to the company's success. The purpose of keyman insurance is to protect the business from financial loss that may result from the death or incapacity of the key person.

Here's how it typically works:

Policy Setup: The business purchases a life insurance policy on the key employee(s) and pays the premiums.

Cover Amount: This is determined based on the financial impact the loss of the key person would have on the business. This could include factors such as loss of revenue, costs associated with finding and training a replacement, or maintaining relationships with clients or suppliers.

Payout: If the key person dies or becomes incapacitated, the insurance policy pays out a lump sum to the business. This payout can help the company cover expenses such as recruiting and training a replacement, compensating for lost profits, or paying off debts.

Keyman insurance is often used by small and medium-sized businesses where the departure of a key employee could significantly disrupt operations or threaten the company's financial stability. Key employees could include founders, executives, top salespeople, or individuals with specialised skills or knowledge critical to the business.

It's important to note that keyman insurance is different from traditional life insurance policies in that the beneficiary of the policy is the business, not the key employee's family or estate. The purpose is to protect the business rather than provide financial support to the employee's beneficiaries.