Let’s Talk Shareholder Protection
Here’s a question that doesn’t get asked enough:
What happens to your business if one of the shareholders is suddenly out of the picture?
And no, I don’t mean they’ve popped over to Bali for a break, I mean something serious: a critical illness, permanent disability, or unexpected death.
It’s not exactly fun dinner table chat, but it is essential business planning.
This is where Shareholder Protection Insurance comes in. Think of it as a practical safety net that lets the business keep ticking while looking after everyone involved; without drama, debt, or dodgy takeovers.
So what is it exactly?
Shareholder Protection (aka a buy/sell agreement with insurance) is designed to:
- Pay out if a shareholder becomes seriously ill or passes away.
- Give the remaining shareholders the funds to buy out the affected partner’s shares.
- Ensure the family or estate of the affected person gets a fair payout—without being dragged into business operations they don’t want.
It keeps the business in the hands of those running it, while giving financial certainty to the family. No legal battles, no forced partnerships, no scrambling for cash.
What if you don’t have a plan?
That’s when things can get messy:
- A shareholder’s family inherits the shares and suddenly wants a say
- There’s no money to buy those shares back
- You risk taking on debt, selling to outside investors, or losing control
And all this… while someone’s going through a family crisis. It’s a lose lose all around.
Real talk: Most business owners don’t think about this until it’s too late.
We plan for sales, marketing, hiring, and growth…
But not enough people think, “What happens if one of us can’t be here tomorrow?”
That’s why I always ask clients:
“Do you know what would happen to your shares, or your business partner’s if something serious came up tomorrow?” “Do you have a shareholders agreement?”
Because if you’re not sure… now’s the time to sort it.
What does it cost?
Not as much as you might think.
For two healthy-ish business owners 42 and 45 its around $160 each per month could cover $500,000 worth of life and $250,000 of trauma protection. That’s real peace of mind for what you’ve spent years building.
Costs depend on:
- Age & health
- Value of your shareholding
- Whether you want just life cover or broader protection like trauma or TPD
But honestly? Compared to the cost of legal battles, ownership disruption, or debt… it’s a no-brainer.
If you’d like to learn more about share holders protection you, book a quick call and I will walk you through it, no pressure.
www.dianamcintyre.co.nz
021888090
