Shareholder Protection

Don’t Forget Your Most Valuable Assets: People Protection for Your Business

At SN Financial, we understand that a thriving business relies on more than just bricks and mortar. Your team – from dedicated employees to key owners – are the true drivers of success.

That’s why business protection shouldn’t be an afterthought. Just like you safeguard your property and equipment, protecting your people ensures your business can weather unexpected challenges.

Why Every Small Business Needs Shareholder Protection

For many businesses, the drive and expertise of their shareholders are the lifeblood of the company. They contribute not only capital but also strategic vision, industry knowledge, and crucial relationships. However, what happens if a shareholder is unexpectedly no longer able to contribute due to death, critical illness, or permanent disability? This is where shareholder protection comes in.

Shareholder protection is a type of insurance policy specifically designed to safeguard a small business from the financial and operational challenges that can arise when a shareholder exits the company unexpectedly.

Here’s how it benefits your business

Financial Stability

  • Provides Liquidity: The insurance pay out can be used to buy out the deceased or incapacitated shareholder’s shares from remaining shareholders. This ensures remaining partners maintain control of the business and avoids the need for potentially disruptive forced sale of assets.
  • Protects Credit Lines: The financial buffer provided by the insurance pay out can help prevent disruptions to your business’s cash flow and creditworthiness.



Zoe, Stu and Jack protection meeting business protection

Share & Partnership Protection: Secure Your Business, Secure Your Partnership

Maintaining control and financial stability is critical for any business, especially when facing unexpected events. Share and Partnership Protection helps safeguard your company’s future in the event of a shareholder’s death or critical illness.

Here’s how it works:

  • Share Protection: Each shareholder takes out life insurance or critical illness cover for the benefit of their fellow shareholders.
  • Partnership Protection: This functions similarly, but ownership percentages are pre-determined and funded by a joint policy.


  • Retains Business Control: Provides surviving shareholders with the financial means to buy out the deceased/ill shareholder’s stake, ensuring continued control of the company.
  • Fair Estate Settlement: Guarantees the deceased/ill shareholder’s family receives a fair market value for their share.
  • Minimises Disruption: Prevents ownership disputes and ensures a smooth transition for the business.

Key Points:

  • Own Life vs. Life of Another:
    • Own Life: Each shareholder insures themselves, offering flexibility for business changes.
    • Life of Another (usually for only two owners): Limited flexibility.
  • Double/Cross Option: Ensures surviving owners can purchase the deceased’s share.
  • Single Option (for critical illness): Allows shareholders to sell their share if they become critically ill.

We can help to explore your options and ensure a secure future for your business and your partners.

Key Person Insurance: Protecting Your Business Engine

What is it?

Key Person Insurance safeguards your business from the financial blow of losing a critical employee – someone whose skills and contributions directly impact your profits. This could be an owner, director, top salesperson, or a specialist with unique expertise.

How does it work?

The policy pays out a lump sum if the insured key person dies or suffers a critical illness (depending on the policy type).


  • Protect Profits: The pay out covers lost revenue and ensures your business can weather the storm.
  • Manage Debts: Funds can be used to service loans and maintain financial stability.
  • Cover Salaries and Loans: The policy helps cover ongoing expenses like salaries and director’s loan repayments.
  • Offset Recruitment Costs: The pay out helps ease the financial burden of finding a replacement for the key person.

Invest in your business’s future with Key Person Insurance.

Group Life insurance word cloud

Executive Income Protection 

The policy is arranged and paid for by the employer (the policy owner) on the life of the employee (person insured). If the employee (person insured) becomes ill or injured and unable to work, the monthly benefit under a claim is paid to the employer (policy owner) who passes onto the employee via PAYE to fund ongoing sick pay. The employer can also cover other costs (for example their employer’s National Insurance and pension scheme contributions). 

Key points

  • Designed for small and medium businesses (SMEs). 
  • Covers up to 80% of the employee’s earnings plus the employer’s National Insurance and pension contributions (maximum levels apply). 
  • Usually counts as a tax-deductible expense for the employer. 
  • More tax efficient than personal Income Protection cover for the employee. 

This is a tax-efficient life insurance policy, allowing companies to offer death in service benefits to their staff. 

Ready to explore your business protection options?

While Share & Partnership Protection offers significant benefits, SN Financial’s experienced advisers can also guide you through alternative solutions like Relevant Life Cover, Income Protection & Whole Life Insurance.

During a free consultation, we’ll discuss

  • Your specific business structure and ownership dynamics.
  • The roles of key employees and their impact on the business.
  • Your tax considerations and financial goals.

By understanding your unique situation, we can recommend the most suitable protection strategy, whether it’s Share & Partnership Protection, Relevant Life Cover, or a combination of both.

Schedule your free consultation today and ensure a secure future for your business and your key personnel.



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Financial advisory in Worcestershire and Kent

Based in Droitwich Spa, we’ve proudly supported clients of all ages since 2004. The opening of our second office in Sevenoaks allowed us to extend our bespoke financial services even further, making SN Financial a trusted financial adviser for individuals, couples, families and businesses across Worcestershire, Kent and the rest of the UK.

Droitwich Office

5 Saltway, Droitwich, Worcestershire, WR9 8LB
01905 779697

Sevenoaks Office

46 Holly Bush Lane, Sevenoaks, Kent, TN13 3TL
01732 926255