What is business protection?

business insuranceIf you own your own business, have you ever thought about what would happen to you, your business and your family if you, or a key person within your business died or was diagnosed with a critical illness and was unable to work for the foreseeable future? A bespoke business protection package could help. Business protection could help ensure that key individuals are replaced, corporate debt is protected and shares from the deceased partner’s/director’s estate are purchased through a cross option agreement. Many believe arranging business protection to be a lengthy and complicated process. But actually, the principles are similar to any other type of protection.

The most significant differences are:

  • Business protection generally incorporates higher sums assured.
  • A claim may be paid to a business, not a family member.

Call us now on 0161 465 0237 to find out more and get a quote.

Types of business protection

  • Partner/Director/Limited Liability Partnership Share Protection
  • Key Person Protection (profit protection)
  • Business Loan Protection or your Commercial Mortgage
  • Relevant Life Plan

Cross Option Agreement

The fundamentals of a cross-option agreement are simple: each shareholder agrees that upon his death his fellow shareholders have the option to buy his shares (and, in some cases, those of his spouse), usually at market value (a so-called ‘call option’) and that his personal representatives (on death) have the option to sell his shares (and, in some cases, those of his spouse) to the continuing shareholders (a ‘put option’).

At the same time, each shareholder takes out a term assurance policy, under which any amount which becomes payable under the policy is held in trust by the continuing shareholders to pay for the deceased’s shares under the put and call options. ‘It is strongly recommended that you consult a legal or tax adviser before proceeding’

Call now on 0161 465 0237 to find out more and get a quote.