Shareholder protection that keeps the business in safe hands
Cover that funds the buyout of a co-owner’s shares if they die or are diagnosed with a critical illness — so the business stays with the people running it, and the family gets paid a fair price for the shares. Cross-option agreement drafted, trust written, whole of market.
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insurers
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partnership protection
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We compare the whole shareholder protection market
Including the business-focused insurers, trust structures and cross-option drafting most high-street advisers never even look at.
How business owners structure shareholder protection
Directors, shareholders, partners, LLP members. We look at the whole ownership structure — shareholdings, articles, existing trusts — in three simple steps. It’s why we’re rated 5.0 on Google.
Map the ownership — who owns what?
Limited company, partnership or LLP? Two equal shareholders or five unequal ones? Any existing articles, trusts or cross-option clauses? 15 minutes over the phone or Teams — we’ll map the cap table with you and agree a fair share value.
Size the cover — each shareholder gets their own policy
Own-life or life-of-another, single or joint — we pick the arrangement that fits your ownership. Each shareholder insures the value of their shares. Sum assured sized on a fair valuation (last accounts, EBITDA multiple, or independent valuer where needed).
Cross-option agreement & trust in place
We draft the cross-option agreement so the surviving shareholders have the right to buy and the estate has the right to sell. Policies written into a business trust — claim pays out to the surviving shareholders, who use the cash to buy the shares from the family.
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the family
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Why shareholder protection matters
If your business co-owner dies tomorrow, their shares don’t come back to you — they pass to their estate. Suddenly you’re in business with their spouse, or their kids, or whoever inherits. You don’t have the cash to buy them out. They don’t have a market to sell to. The relationship sours. The business suffers.
Shareholder protection funds the buyout. Each shareholder insures the value of their shares, the policies sit in a business trust, and a cross-option agreement gives both sides the right to buy and sell at a fair price. If one of you dies, the surviving shareholders get the cash to buy the shares, the family gets paid what they’re worth, and the business keeps running.
Book a shareholder review →Every kind of shareholder & partnership protection
Two-director limited companies. Five-way shareholder splits. Partnerships. LLP member agreements. Every ownership structure needs a different arrangement — here’s how we tailor it for yours.
50/50 limited company
Two equal shareholders, clean buyoutThe classic setup — two co-founders, 50/50 split. One own-life policy per director, both held in a cross-option trust. If one dies, the other gets the cash to buy the shares at a fair valuation.
Multi-shareholder companies
Unequal splits, written properlyThree or more owners — each with a different shareholding. We size each policy to the real value of each shareholding, with a single cross-option agreement that works however the numbers shake out.
Partnership protection
Buyout cover for traditional partnershipsNo shares, but capital accounts, goodwill and profit shares still have to be bought out when a partner dies. We structure the cover and draft the partnership buy-out agreement to match.
LLP member protection
Designated & non-designated membersLLPs need cover built around the members’ agreement — not a standard shareholder template. We align the policies with your existing LLP agreement and the capital basis each member is paid out on.
Family-owned businesses
Protect the next generation’s futureShares passing between generations adds an extra layer — IHT, business property relief, who takes over. We structure cover that works alongside your succession plan, not against it.
Critical illness add-on
Pays out on diagnosis, not just deathA shareholder critically ill but still alive is often the trickiest scenario. Adding CI means the other shareholders can buy them out on a diagnosis too — giving everyone a clean exit route.
Company purchase of own shares
The company buys the shares, not the survivorsFor some structures, it’s cleaner for the company itself to buy back a deceased shareholder’s shares (CPOS). We arrange company-held cover and the right HMRC clearance so the buyback is tax-efficient.
Cross-option agreement
The legal paperwork that makes it workShareholder insurance without a cross-option agreement is just a pot of money with no agreed route from surviving shareholders to the estate. We draft the agreement so both sides have clear rights and the buyout actually happens.
The Montgomery shareholder protection promise
Whole-of-market insurers
Aviva, L&G, Royal London, Vitality, AIG, Scottish Widows and more — we compare every shareholder-focused insurer, not just one panel.
Fair share valuation
Last accounts, EBITDA multiples, net asset value or independent valuer — we pick the right basis so the sum assured matches the real value of each shareholding, today and at review.
Cross-option agreements drafted
Shareholder insurance is only as good as the legal paperwork behind it. We draft the cross-option agreement so the buyout is fair to both sides and actually happens when it matters.
Trust paperwork included
Policies written into a business trust pay out faster, outside the estate, to the surviving shareholders — ready to buy the shares. We set it up properly — no extra fees.
One dedicated adviser
One human from first meeting to policy on risk — talking directly to your accountant and solicitor where needed, not bounced around a call centre.
Annual reviews built in
Business valuations change. Shareholdings shift. New directors join. We review your cover every year to keep the sum assured, trust and cross-option agreement matched to what’s actually happening in the business.
Don't take our word for it
Shareholder protection FAQs.
Quick answers to the questions directors and business co-owners ask us every week.
Ask a real person →What exactly is shareholder protection?
It’s life cover (often with critical illness added) taken out on each shareholder, with the proceeds paid to the surviving shareholders via a business trust. If a co-owner dies or is diagnosed with a critical illness, the cash funds a buyout of their shares from the estate — so ownership stays with the people running the business, and the family gets paid a fair price for the shares.
What’s a cross-option agreement — and do we really need one?
Yes. Without one, the insurance just sits as a pot of money with no agreed route from the surviving shareholders to the estate. The cross-option agreement gives the survivors the option to buy and the estate the option to sell, at a pre-agreed valuation basis. It’s what turns the insurance into an actual buyout. We draft it as part of the arrangement.
How do you value the shares?
We pick the method that fits the business: last filed accounts, an EBITDA or revenue multiple, net asset value, or an independent valuer for bigger or more complex companies. The important bit is that the method is agreed up-front and written into the cross-option agreement — so there’s no argument later about what the shares are worth.
Who owns the policies and who gets the payout?
Most arrangements use own-life policies held in a business trust: each shareholder owns a policy on their own life, written into trust for the benefit of the other shareholders. If a shareholder dies, the trust pays out to the survivors, who use the cash to buy the deceased’s shares from the estate. It’s clean, tax-efficient, and keeps everything outside the estate for IHT.
Are the premiums tax-deductible?
Generally no — shareholder protection premiums are usually paid from post-tax income because the benefit is personal (the shareholder keeps the cash to buy shares). There’s usually no benefit-in-kind either. The trade-off is a clean, tax-free payout and preserved Business Property Relief for IHT. We walk through the tax position with you and your accountant.
What if our shareholdings are unequal?
Very common. Each shareholder is insured for the value of their own shares, so a 60/40 split just means the bigger shareholder has a bigger sum assured (and a bigger premium). The cross-option agreement handles the rest — the survivors buy whatever percentage the deceased held. No problem, as long as the values and agreement are set up properly.
Let's keep the business in the right hands
Free 20-minute call with a Montgomery adviser. We'll map your ownership structure, size the cover properly, draft the cross-option agreement and write the trust — all in one arrangement.
Book a shareholder review →