Buy & Sell Cover

Safeguard your business against the unexpected.

What is Buy & Sell Cover?

Buy & sell insurance pays a lump sum to surviving shareholders if a partner passes away.

Also known as share purchase cover, it works alongside a buy and sell agreement to give surviving partners the funds needed to buy the deceased’s shares from their estate helping keep the business ownership clear and within the partnership, rather than passing to the deceased’s family.

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Who owns the buy and sell cover?

Usually paid for by the business, buy and sell policies are taken out by shareholders to cover each other.

These policies can be tailored to fit your specific shareholding structure, including joint policies such as shareholders A and B covering shareholder C.

It’s also important that the policy is held by the entity that owns the shares, like a trading trust, rather than by the individual shareholder alone.

Do we need a buy and sell agreement in place?

While not mandatory, having a buy and sell agreement is highly recommended to avoid complications.

Consult a lawyer to draft one, and ensure it includes a clear valuation method that matches your insurance cover.

What happens if our business changes?

Regularly reviewing your insurance is essential. As your business evolves, it’s important to ensure your coverage reflects its current value. Chat with your advisor about how often you should update your policy.