At TAT, we are passionate about providing businesses with accurate and helpful tax and financial service information. When it comes to financial services, there are so many different types of cover that it can be hard to tell what cover is actually needed for your organisation. While businesses oftentimes require multiple types of cover, ensuring that your business has comprehensive buy and sell cover is absolutely crucial.
Buy and sell cover is a policy that will pay a lump sum to the business if any of the business owners were to die or become disabled. This is an important policy to have because you truly never know what could happen. If something suddenly happened to your business partner, what would you do? Would you be able to cover the finances on your own? Most likely not. Buy and sell cover would allow you to purchase your partner’s half of the business to ensure that it does not go bankrupt. This type of cover also ensures that the other partner or their family would be able to be fairly compensated for surrendering their share of the business.
Buy and sell cover can protect business owners from many unfavourable outcomes if their partner were to become disabled or pass away. Without this type of comprehensive cover, the spouses of deceased partners could legally fight to keep their share of the business with or without working for it. It can also prevent the family of the disabled or deceased partner from selling their share of the business to a third party against the wishes of the living business owners.
This type of cover is extremely important to have when you run a business. Not only can it protect you from several taxing consequences, but it can also help keep the business afloat despite the disability or death of a business partner.