Partnership Insurance

Protect your business and your partners when life changes.

What is partnership insurance?

Partnership insurance is designed to protect the continuity of a business when a partner passes away or is unable to work. This type of coverage helps ensure that the remaining partners can buy out the affected partner’s share, avoiding disruptions to the business and providing financial support during a difficult time.

How does it work?

In the event of a partner’s death or disability, the policy pays out a lump sum, giving the surviving partners the necessary funds to purchase the departing partner’s interest in the business. This allows the business to continue operating smoothly, while the surviving partners retain full ownership and control without facing financial strain.

Who is it best suited for?

Partnership insurance is ideal for businesses with multiple owners who want to protect their operations from the potential financial burden caused by a partner’s sudden departure. It's especially valuable for companies that rely on the seamless transition of ownership and wish to avoid the complications of legal disputes or financial instability.

Key components of a
Partnership Insurance

Align the agreement, valuation, and funding so ownership transfers are timely, fair, and financed.

01 Ownership Transition

Partnership insurance ensures that business operations remain uninterrupted if a partner passes away or becomes incapacitated. The policy provides funds to allow the remaining partners to buy out the departing partner’s share, ensuring smooth ownership transfer without complications.

02 Secure Finances

This coverage protects surviving partners from financial stress by providing a lump sum to buy out the affected partner’s share. It allows the business to continue running without jeopardizing the company or the personal finances of the remaining partners.

03 Avoid Disputes

With a clear buyout plan in place, partnership insurance minimizes the risk of legal conflicts. It establishes a structured process for ownership transfer, ensuring all parties are aware of their roles and responsibilities, thus facilitating a seamless transition.

Protect your partnership

Lock in a clear and funded exit plan.

Speak to an advisor

Frequently Asked Questions

How is the payout used?

The insurance payout is used to buy out the shares of a deceased or disabled partner, allowing the remaining partners to maintain control of the business without financial strain.

What if a dispute arises between surviving partners?

Partnership insurance is usually paired with a buy-sell agreement, a legal contract that outlines how a partner’s shares are handled in the event of death or disability. This ensures a clear process for ownership transfers and helps prevent disputes, with the insurance payout funding the buyout.

Can a buy-sell agreement be customized?

Yes. Buy-sell agreements are flexible and can be tailored to your business’s specific needs, including the number of partners and how the business is valued.

Is this type of policy tax-deductible?

Premiums are generally not tax-deductible, but the payout is typically received tax-free, making it a tax-efficient way to fund a partner buyout during a challenging time.