Protect your business with Co-director Insurance
A strong board of directors forms the strategic and financial life-blood of any company. The sudden loss of a director through death, or ill health can potentially have very negative consequences on a business. Co-director Insurance will allow the company to buy a director’s shares from their next-of-kin if these unfortunate events occur. This will bring stability to the business, as the remaining directors gain full control of the company. And it could be a good option for the family of the deceased, who may not have the desire or expertise to take on this role.
What is Co-director Insurance?
This is business-specific life insurance that can provide compensation to shareholders of a company. If one of the directors dies, a lump sum will be released, enabling the surviving directors to buy the deceased person’s shares from their next-of-kin.
How does it work?
You will pay a premium on a regular basis, based on the cover that is required and the value of the shares of the director. If the unexpected happens and this director dies, the policy will provide a lump sum to compensate for this event. This can be used to buy the deceased directors’ shares from his/her next-of-kin.
- Peace of Mind: Company directors know they will be in the position to keep control of the company.
- Ease and Choice: The deceased’s successor is not obliged to become involved in the business.
- Stability: The remaining directors can retain ownership of the company and provide continuity for the business.
- Options: This insurance can also provide serious illness cover.
Who is Co-director Insurance for?
Co-director Insurance can be taken out by the directors of a company of any size. It will provide funds to allow for the purchase of the shares from next-of-kin, in the event of the death of one of the directors.
Why take out Co-director Insurance?
The death of a director may bring distress and grief to any organisation. As well as that, it could jeopardise the security and direction of the company. If the deceased director was a majority stakeholder, the remaining directors may lose control of the company if next-of-kin were to take over. The deceased’s family may be unfamiliar with the business and may have cash-flow problems after losing his/her income. Co-Director Insurance makes it possible for the directors to buy the shares from the family, which could be the best option for all concerned.
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