Key person, shareholder, relevant life.
If a key director or shareholder were unable to continue tomorrow, what would happen to the company? Business protection puts cover in place for the people the business itself depends on — tax-efficiently, and through the right legal structures.
Personal life cover doesn’t protect the company.
If the founder, a fellow shareholder, or a key salesperson died or became seriously ill, the company itself faces a financial gap — lost revenue, an unfunded payout to a deceased shareholder’s family, or the cost of replacing someone irreplaceable.
Business protection covers three distinct scenarios. Key Person cover pays the company a lump sum if a critical employee dies or is critically ill. Shareholder Protection funds the buy-back of a deceased shareholder’s shares from their family — with a cross-option agreement to make sure both sides have the right to act. Relevant Life is tax-efficient life cover for the director, paid for by the company.
Set up correctly — with the right trust structure, the right cross-option agreement, and the right ownership — each of these is a small monthly cost against a meaningful business risk.
The cost of no business cover.
Most owner-managed businesses are one phone call from disruption that personal protection won’t address.
With business protection in place
- Key Person cover provides company funds to replace lost revenue
- Shareholder Protection funds the buy-back from a deceased shareholder’s family
- Cross-option agreement gives both sides clarity and obligation
- Relevant Life provides tax-efficient personal cover paid by the company
- Policies written into appropriate trusts for the right payout route
- Reviewed when shareholdings, valuations or directors change
Without it
- Revenue collapse with no liquidity to fund recovery
- Surviving shareholders forced into business with the deceased’s family
- Or forced to sell parts of the company at the worst possible time
- Personal life cover paying out, taxed inside the estate
- Bank lending pulled at the moment the company needs flexibility
- Family of deceased shareholder left with illiquid shares and no income
Strategy, not product pushing.
A four-step process that’s the same for every client — though the conclusions never are.
Identify the exposure
Who is the business genuinely dependent on, what would each loss cost, and how is the shareholding structured.
Design the cover
Type, amount, ownership, trust structure, cross-option agreement — chosen to fit the specific scenario each policy covers.
Arrange policies and paperwork
Whole-of-market quotes, underwriting handled, trust deeds and cross-option agreements drawn up with a solicitor where needed.
Keep it relevant
Annual valuation review, shareholding changes flagged, new directors brought in — the cover needs to track the business as it grows.
Things people often ask.
What is Key Person cover?
A life and critical illness policy owned by the company on a key individual — usually a founder, top salesperson, or technical specialist. If they died or became critically ill, the company receives a lump sum to fund recovery, recruitment or short-term revenue replacement.
What is Shareholder Protection?
Cover that pays out if a shareholder dies or becomes critically ill — with a cross-option agreement so the remaining shareholders can buy back the shares from the deceased’s family at a fair value. The family gets cash; the remaining shareholders keep control.
What is Relevant Life cover?
A tax-efficient life cover policy that the company pays for on behalf of a director or employee. It’s usually treated as a deductible business expense, and the payout isn’t taxed as a benefit-in-kind or under income tax for the recipient.
How is the cover amount worked out?
For Key Person, usually a multiple of the individual’s contribution to revenue or profit. For Shareholder Protection, the value of their shareholding. For Relevant Life, the director’s personal cover needs. Each is sized to the specific scenario.
Are the premiums tax-deductible for the company?
Sometimes — depends on the policy type and the purpose. Key Person cover often is. Shareholder Protection usually isn’t. Relevant Life almost always is. Worth getting the structure right at outset rather than retrofitting.
What about cross-option agreements?
The legal document that gives surviving shareholders the option to buy — and the deceased’s family the option to sell — the shares funded by the protection policy. Without it, both sides could end up stuck. They’re drafted with a solicitor.
Let’s start with a conversation.
An initial review is without obligation. The first conversation is about identifying the exposure — not selling you cover.