Buy/Sell Insurance

Buy/Sell Insurance

Because the unexpected does happen

The need to protect your business and family interests against catastrophe is paramount. It is therefore important for owners to ensure the necessary funding mechanism is in place to buy-out each owner’s share in the event of certain triggers e.g. the occurrence of a critical illness, permanent disablement, illness resulting in an inability to work, or even death.

There are two components of a Buy/Sell partnership agreement, one being the insurance cover and the other is a legal document drafted by a solicitor. By holding Life Insurance, Total & Permanent Disabiity or Trauma Insurance for Buy/Sell purposes, you are able to fund the transfer of the business in accordance with the "trigger event' listed in your Buy/Sell partnership agreement. Therefore you do not have to fund the purchase yourselves or worry about having to take on additional loans or interest.

This agreement is used to prevent the following situations:

  • Third parties such as family members or friends of a deceased owner having an unacceptable degree of control in the business.

  • A deceased owner's estate could demand a pay out.

  • It could be necessary to negotiate additional borrowing or face asset depletion to pay out a deceased owner.

  • Lending institutions could seek repayment or renegotiation of loan facilities.

A Buy/Sell partnership agreement provides business continuation with a minimum of disruption.

Any person involved in a business partnership... should

consider having a Buy/Sell partnership agreement

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