Partnership Protection - What Is It? And How Can It Help?

When owning a business there are a lot of things to think about. Your partner and your business are two areas you should focus on. The responsibilities you each hold, how your money is invested and what you each expect to gain from the business. What you may not consider is what would happen should your partner become critically ill or die in unforeseen circumstances. You could lose the entire company if the shares are sold to the wrong hands. Meaning a loss of your company and your income. As well as job losses for all the employees of the company, and compensation or redundancy payouts. There is an insurance policy, called Partner Protection Insurance which can protect you and your partnership from unforeseen circumstances.What is Partner Protection and why do I need it? When owning a business with a partner or maybe more than one, the roles and responsibilities are normally split between you all. What if something bad were to happen to one of the partners in the company? Apart from it being a terrible tragedy, what would happen to the company and the rest of the partner's lives? With partner protection insurance you are covered for those bad things that could happen, like losing the share in the company or the whole company itself. Partner protection helps give you the opportunity to stay in control of the business and not lose it. The loss of a partner will mean a loss of income or the loss of the entire business. Getting Partner protection protects you from this. Otherwise you could find yourself not just losing a partner but also losing your company and your entire source of income.

The main things to think when purchasing Partner Protection insurance is that it: Protects the Business -> Protects both Partners -> Protects your Families

How Does Partner Protection Work For Me?
If a partner in your company were to pass away or become seriously ill, a tax-free lump sum of money will be paid out to the remaining partners, from the Partner Protection Insurance policy. As long as you can provide a valid claim the money is sent to you and the other partners to help keep the company stable. The money can be used to help cover expenses, provide wages, help support the company or to purchase the deceased partner's side of the company. If your partner dies the partnership is dissolved and the company could become unable to trade. Having Partnership Protection will stop this from happening and gives you the funds to protect the company.

Main Benefits:

1) Give the remaining partner the funds to buy the deceased shares in the company
2) Protects your investment in the company
3) Guarantees the deceased partner's family a financial sum from the shares

Just like life Insurance, Partnership Protection Insurance is there to make sure that you, your family and the business are all protected financially. It guarantees that the business will be able to continue with minimal disruption. It provides the necessary funds for the remaining partner to buy the shares of the deceased or critically ill partners, and take full responsibility of the company. This not only stops the shares from being sold to the wrong person or from being brought put by a competitor. It also helps the family of the partner sell those shares quickly and gain access to necessary funds they are entitled to. It also just helps the company and the remaining staff from being disrupted to severely. It's there to protect your investment, stopping your time and money from going to waste. 39% of business owners expect to be out of business within 18 months of the death or critical illness of their top staff, this is a high percentage and highlights how important partnership protection insurance is. Who can have a Partner Protection Insurance policy? One thing to remember when purchasing Partner Protection Insurance is that if there are more than one partner's in the company, and then you need more than one policy. It's designed to protect any co-owned company. You need one policy per person in the company, as that policy only covers the shares for that partner. The policy helps protect your side of the company and your investment in the company, however it does give the company a lump sum after you pass to help protect the other partners and help them purchase your shares so the company can carry on running.