If your business has shareholders, it’s crucial to begin thinking about shareholder protection, and how it can provide your business with a vital safety net in the case a shareholder ever was unable to work due to serious illness or injury, or if they were to pass away.
No one wants to think of the worst, but the loss of a fellow shareholder can throw a business into uncertainty, which is why shareholder protection is something to consider in the case this was to happen, especially if it happened unexpectedly.
Wondering if Shareholder Protection is right for you? Here are some reasons you should consider a policy:
- If one of the shareholders of your business dies without a policy in place, what happens to their stake in the business?
- Ensuring a policy is in place can help your business have a smooth transition in the case shares change hand and therefore will help avoid business disruption.
- When the companies shares are bought out by other shareholders, the insured person’s beneficiaries will know how much they will receive.
If you’re a small business, having insurance like this can be vital as you may struggle to raise buy-out capital if the worst happens.