Two conversations, one meeting.
We look at who the business depends on, what it would cost to lose them, and whether anything you already have would do the job.
Book a first meetingKeyperson cover: insuring the business, not the person
In most small companies there is somebody the business genuinely could not do without for long. Often it is the owner. Sometimes it is the person who holds the client relationships, or the one who actually knows how everything works.
Keyperson cover pays money into the company if that person dies or becomes seriously ill. Not to the family, to the business. It is there so the company can hire a replacement, cover the shortfall in turnover, reassure the bank, and survive the gap.
How to size it
The tax treatment depends on the role of the person insured and how the policy is set up. In broad terms, where cover is on an employee who is not a significant shareholder and the policy meets certain conditions, premiums may be deductible and any proceeds taxable. Where the person is an owner, it often works differently. This genuinely needs to be structured correctly at the outset, with your accountant, rather than fixed afterwards.
Co-director cover
Here is the situation. You and a business partner own the company between you. Your partner dies. Their shares pass to their family under their will.
You are now in business with your partner’s spouse. They may have no interest in the business and desperately want to be bought out. You may desperately want to buy them out. And there is very likely no money available to do it.
Meanwhile the family has inherited an asset they cannot easily sell, in a company they have no involvement in, at the worst moment of their lives. Nobody in this situation is happy.
How it is solved
Two pieces, and they must go together.
An agreement with no money behind it does not work. Money with no agreement in place leads to argument. You need both, and they need to be written to work together. Review the cover whenever the business changes, because a valuation from six years ago will not buy the shares today.
Pick a date and time that suits you.
No sales pitch, just a conversation about what you already have, what it is heading for and whether we can improve it. You will get a written summary either way.
