It can be difficult enough planning for the foreseeable events in a business, let alone the ones you don’t expect!
Partnership Insurance provides certainty – it protects your business by insuring each individual business partner for death and serious illness or injury.
If a business partner were to pass away, the beneficiary of his or her estate (usually their spouse) would generally assume ownership and control. They would potentially take on the executive responsibilities of the deceased partner, even though they may not (and usually don’t), have the same skills or objectives as their spouse. This often leads to disunity, changes in direction for the business and an overall decline in business growth and profitability.
What we offer
Partnership Insurance, sourced through Elodus, can pay out the deceased partner’s family an agreed value, providing the remaining partner(s) with full ownership and control of the business.
What would happen if you found yourself working with the spouse of your business partner? Could you afford to buy them out? If they did not want to sell their equity, could you continue to operate your business effectively with them? These events happen in businesses on an all-too-regular basis.
With the right support and guidance you can take comfort knowing that your business and, more importantly, your family, will be protected with appropriate Partnership Insurance.
A recent example is an existing client of Elodus. Their business is a manufacturer of chilled dairy products and one of the largest family owned businesses in Australia. The business was started over forty years ago by two brothers, Chris and Charles. In 2000, Chris was tragically killed. Without any succession plans in place, Chris’ wife, Tamara, stepped in as the operational director and assumed joint decision-making responsibility, with Charles, for the whole business.
Charles and Tamara had never intended to be business partners and did not see eye to eye on many issues. They had very different approaches to how the business should run and plans for the future. Over time communication between the two Directors completely broke down and decisions could not be made.
The biggest point of contention was that Tamara wanted the business sold while Charles wanted to continue growing it and maintain family ownership.
Seven years of legal proceedings ensued and the business went in to voluntary receivership eventually being put up for sale despite being extremely profitable and successful.
If Chris and Charles had appropriate Partnership Insurance with supporting documentation in place, on Chris’ death, his family would have been paid for his equity in the business, and Charles would have retained ownership and control of the business he founded. The business would have continued with minimal disruption and many thousands of dollars would have been saved in legal fees.
This example shows that regardless of the size of a business, a minor oversight can spell the end!
For a complimentary appointment to discuss Partnership Insurance, please contact us here .