Shareholder Protection


 Insurance to protect your business, its shareholders and your beneficiaries


Shareholder protection or buy/sell insurance is designed for businesses owned by multiple shareholders or partners.

In the event you or a fellow shareholder is lost to death or disablement, a shareholder agreement (duly drafted and executed by a lawyer), together with shareholder protection cover can provide certainty and minimise the impact on the business, by clearly setting out what is to happen.

Typically an agreement is made that on the death or disablement of a shareholder, the remaining shareholder(s) will purchase the shareholding from the estate or family with the proceeds of a shareholders protection insurance policy. In this way, the beneficiaries are appropriately compensated for the value of the shares held, and the business can continue to be run by the remaining shareholder(s).

Benefits for the remaining shareholder(s):

  • No need to raise capital or borrow funds at an inopportune moment to purchase the shares
  • Won’t find yourself in business with the deceased shareholder’s beneficiaries
  • Prevents a forced sale of the business to pay out the estate
  • Business can return to normal as quickly as possible

Benefits for the estate or family members:

  • Agreement in place to ensure a fair buy-out price and a quick, easy process
  • A cash payment to relieve the financial stress of losing a key breadwinner


Daniel Smithwood Titirangi localDaniel answers a common question 

How much should my business be insured for on a shareholder protection policy?

The first step is to ascertain the value of your business. There are a number of different ways to value a business, so in consultation with your accountant, and depending on the type, size, turnover and profitability of your business, a value that best reflects your business will be set. From this point, and based on the shareholding percentages of each major shareholder, the insurance values can then be assigned. 

Ask Daniel about business insurance


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Daniel has my full trust when it comes to my insurances. He spent time looking over what I already had in place and advised that it was not in my best interests to change anything even though I could have. I know that insurance advisers earn their income via commissions, so right then, I knew that he truly does what is best for his clients.  Lisa, Auckland