Shareholder Protection Insurance Cover

Shareholder Protection Insurance Cover

What happens if an owner or part-owner of a company dies unexpectedly?

Regardless of the industry you operate in, it’s critical to ensure that you protect your business with a safety net. After all, it represents not only the livelihood of you and your family, but also that of your employees and fellow shareholders.

The event of a business owner dying unexpectedly can have a serious detrimental effects on their enterprise, not to mention the lives of their family. When it comes to distributing shares, family members and other beneficiaries may prefer to cash them in. Meanwhile other shareholders may wish to purchase the shares but may not have adequate funds at their disposal. This is where shareholder protection insurance comes in extremely useful.

The benefits of shareholder protection insurance:

  • A safe and stable business plan
  • Support for family members
  • It covers serious illnesses

Key Person Insurance

The death of a key employee in a business can have a devastating financial impact. You can provide your business with a safety net against the death, terminal or critical illness of a key employee with key person protection.

  • What is Key Person Protection?

Put simply, Key Person Protection (also known as key man insurance) is a business insuring itself against the financial loss it would suffer if a key person in their business died or were diagnosed with a specified critical illness.

  • How does Key Person Protection Work?

Key Person Protection is a life assurance or life assurance and critical illness cover policy taken out to cover the life of a key person within your business. The policy is owned and paid for by the employer, so any pay-out is payable to the employer.

  • Why do I need Key Person Protection?

The business could suffer badly, with sales and profits falling and increased workloads for the remaining staff. The reason this coverage is so important in a small company is because the death of a key person could also lead to the immediate death of the company itself.

The Budget 2016 – The Highlights and Summary

The Budget 2016 – The Highlights and Summary

George Osborne has revised down the UK’s growth forecast in his 8th Budget and warns about a “dangerous cocktail” of global economic risks. However, he believes the UK is “well placed” to handle it. Mr Osborne will seek to save £3.5bn by 2020 through extra spending cuts.

  • He froze fuel duty but announced a 2% increase in tax on cigarettes, with 3% on rolling tobacco.
  • He said the £530m raised by a tax on the makers of sugary drinks would be spent on boosting school sports.

Mr Osborne said the Office for Budget Responsibility had made clear its forecasts were based on the assumption the UK would remain in the UK and had warned that “there appears to be a greater consensus that a vote to leave would result in a period of potentially disruptive uncertainty”.

Growth forecast to be 2% in 2016, down from 2.4% in November’s Autumn Statement and GDP predicted to grow 2.2% and 2.1% in 2017 and 2018, down from 2.4% and 2.5% forecast four months ago.

Key Announcements 

  • Mr Osborne confirmed that he has failed to meet a fall in debt as a proportion of GDP this year.
  • The UK is still on course to clear its deficit by 2019/20.
  • Corporation tax to be cut to 17% by April 2020 – great news for small business.
  • An extra £700m for flood defences – to be paid with a 0.5% increase on the tax on insurance premiums.
  • Reforms to business rates which will mean 6,000 small businesses pay no rates and 250,000 have their rates cuts from April 2017.
  • New action to tackle overseas retailers who who store goods in Britain and sell them online without paying VAT.
  • New tax free allowances for “micro entrepreneurs” who rent their homes or sell services through the internet.
  • Chancellor George Osborne has unveiled a tax on the makers of sugary soft drinks to tackle childhood obesity.

Savings, Allowances and Tax

  • A new lifetime ISA to be introduced allowing anyone under 40 to save £4,000 per annum till age 50 and receive tax relief at 25%.
  • ISA limit to increase from £15,240 to £20,000 in April 2017.
  • Personal allowance to increase to £11,500 by April 2017.
  • Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers.
  • The threshold at which people pay 40% tax will rise from £42,385 to £45,000 in April 2017.
  • The Money Advice Service, which has provided financial advice to consumers since 2010, is to be abolished.


  • Headline rate of corporation tax – currently 20% – to fall to 17% by 2020.
  • Anti-tax avoidance and evasion measures to raise £12bn by 2020.
  • Annual threshold for small business tax relief to be raised from £6,000 to a maximum of £15,000, exempting thousands of firms.
  • Supplementary charge for oil and gas producers to be halved from 20% to 10%.
  • Petroleum revenue tax to be “effectively abolished”.
  • £9bn to be raised by closing corporate tax loopholes and tax minimisation schemes.
  • Use of “personal service companies” by public sector employees to reduce tax liabilities to end.
  • Commercial stamp duty 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. New 2% rate for high-value leases with net present value above £5m. Effective from midnight.
Ruthin Castle Auto Enrolment Workshop

Ruthin Castle Auto Enrolment Workshop

September 26th 2015

Free Auto Enrolment Workshop @ Ruthin Castle Hotel

Support for Local Businesses

If your business is enrolling / staging for Auto Enrolment in the next 12 months, you and your payroll manager cannot afford to miss this great local event.


8:00am Arrival with Tea / Coffee and Bacon Rolls

8:15am Auto Enrolment by Heritage Financial Solutions Ltd

8:40am Q&A Session

9:00am Break for informal networking

Call 01352 770 845 or email to sign up

Venue Location

Ruthin Castle Hotel
Castle Street
LL15 2NU

Flintshire Auto Enrolment Workshop

Flintshire Auto Enrolment Workshop

September 10th 2015

Free Flintshire Auto Enrolment Workshop @ Soughton Hall Hotel

Support for Flintshire Businesses

If your business is enrolling / staging for Auto Enrolment in the next 12 months, you and your payroll manager cannot afford to miss this great local event.


8:00am Arrival with Tea / Coffee and Bacon Rolls

8:30am Auto Enrolment by Heritage Financial Solutions Ltd

8:55am Q&A Session

9:00am Payroll Integration by Bennett Brooks Chartered Accountants

9:25am Q&A Session

9:30am Guest Speaker – John Durham

9:50am Break for informal networking

Call 01352 751 368 or email to sign up

Venue Location

Soughton Hall Hotel


What is Key Person Insurance

What is Key Person Insurance?

Key person insurance (also known as Key man insurance) put simply, is life insurance on a key person within a business. In a small business this is typically the business owner, or perhaps a key employee or two. These are the people who are critical to a business — the ones whose absence could potentially sink the company. For example if something happened to the top sales person, the loss of revenue could cause major financial implications for the business.

So how does Key Person Insurance work?

Here’s how key person insurance works: A company purchases a life insurance policy on its key employee(s), pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The reason this coverage is important is because the death of a key person in a small company can cause the immediate death of that company. The purpose of key person insurance is to help the company survive the blow of losing the person who makes the business work.

The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. In a tragic situation, key person insurance gives the company some options other than immediate bankruptcy.

If the company is a sole proprietorship and employs just you and no other employees or has no other people who depend on it, then key person insurance isn’t as necessary. You’ll notice we didn’t mention your family – don’t confuse key person insurance with personal life insurance. If you have a spouse and/or children who depend on your income, then you should have personal life insurance for that purpose.

Who typically needs this insurance?

Look at your business and think about who is irreplaceable in the short term. Within small businesses certain key staff hold so much experience and knowledge of processes and systems, that if anything was to happen to them, it’s not just a matter of replacing them – a new person could take years to fill their boots.

In many small businesses, it’s the owner who holds the company together – they may keep the books, manage the employees, handle the key customers and so on. If that person is gone, the business pretty much stops.

How much key person insurance do you need?

That depends on your business, we recommend you seek independent financial advice from an adviser who is experienced in business protection.

This article should be taken as information only and should not be taken as advice.