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. It could also 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. In addition to 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 or 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 parties concerned.
Talk to us today
Talk with an insurance specialist at Smart Financial to see if Co-director Insurance is right for you and to discuss other Insurance options to give your business the peace of mind it deserves.
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