Business Protection

Failing to plan for the death / serious illness of a major shareholder / partner can have disastrous effects for the survival of a company / business. A simple business protection plan can ensure the successful survival of a company / business and ensure the correct ownership of a company on the death of a major shareholder.

Business Protection is about having properly structured life assurance policies to deliver money into the right hands at the correct time. A survey by the Irish Marketing Surveys showed that almost 70 per cent of Irish business had not arranged any form of Partnership/Co Director Protection, to enable them or the company to afford to buy out the shares of colleagues who die, where desirable.

In addition, many small to medium size businesses are heavily dependent on the skills, experience and business contacts of a few key employees/directors, the death of these could have devastating effects on the business.

Therefore, one may need to consider putting Key Person assurance in place, i.e. life assurance on the Key Person with the benefit payable to the company.

Partnerships & Limited Companies – What problems would you face ?

• You would need to employ someone else to see the business through a difficult period – and that could involve considerable extra money.
• You may have the right to buy out your partner’s share – but would you have sufficient funds available?
• If not, you could end up in business with your former partner’s dependants – who will have inherited the share in the partnership, even though they probably won’t be able to make any contribution towards the success of the business.
• Even worse, perhaps, they might decide to sell their share in your partnership to someone else – possibly a competitor of yours. This could make the operation of your business very difficult.

How life assurance can help

Suitable policies can be arranged on the lives of each of the partners so that, if one of you dies:-

• Money will be paid to the survivors, enabling you to buy out your ex-partner’s share.
• The funds will also enable the business to keep going, employing short-term staff to handle the immediate workflow crisis. This gives you the time to ensure that you recruit the right person as your new long-term partner.