How can I protect my business?

If you own or run your own business then you'll be aware how vital you are to its success.

So have you considered what would happen if you died prematurely - would it be able to carry on without you? Would you want your family to be preoccupied with work having just lost a loved one?

Life insurance policies can be effective in protecting the interests of your business.

These policies are usually intended to protect:

• Shareholder directors
• Partners in business
• Key employees
• Any business loans

Shareholder Directors

If there are five directors or less in your company, you may have a vested interest in your competitors getting their hands on shares in your business.

If a director shareholder died unexpectedly this could create the opportunity your competitors have been waiting for to get a hold on your company.

By setting up an agreement helps to direct what options are available to the surviving directors, this danger can be reduced significantly. You simply agree that the existing shareholders can have first refusal on your shares should you die. In addition, a life insurance policy is normally set-up alongside the agreement to provide the funds for the shareholders to buy your shares in the business.

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