
Partnership Insurance and Why Businesses Should Have It
by Tim Abrams – Senior Financial Advisor | Walsh Group
Protecting and minimizing the risk to you and your business is of the highest importance to you and your partners.
Businesses will most likely have already put measures in place such as insuring property, equipment, stock and vehicles. While these are all very sensible precautions, you should also consider Partnership Insurance and ask yourself two very important questions. If one of the partners in your firm were to die, what would happen to your business? Would the surviving partners have the funds to buy out the deceased partner’s share of the business?
Although these are not questions any of us like to think about, the reality is that the chances of one of the partners in a firm dying during their working life is much higher than you may think. And the business consequences can often be devastating.
What are the consequences of not having Partnership Insurance?
- Deceased partners share of the business automatically becomes the property of their estate.
- The value of the deceased partners shares effectively becomes a debt that can be immediately called in on proof of death, unless there is a written or verbal agreement between the partners to the contrary.
- The surviving partners may be unable to raise the capital required to fund the repayment of the deceased’s share of the firm to the deceased’s estate.
- The Partnership may be dissolved, with the surviving partners now no longer being part of a previously active and productive business.

What is the solution?
- Partnership Insurance can provide the funds to enable the continuing partners to buy out the share of a partner on his or her death.
- A legally binding agreement is drawn up.
- One or more Life Cover policies are put in place.
- This ensures that the funds are available to the continuing partners to buy the deceased partners share of the firm, when needed.
What are the benefits?
- Partnership Insurance allows you to put the structures in place now to deal with the business consequences of your death or one of your fellow partners.
- The surviving partners retain full control over the firm as they are in a position to immediately buy back a deceased partner’s share if they so wish.
- The next of kin have the certainty that they can immediately realise the value of the deceased’s share of the firm by way of a capital lump sum.

At Walsh Group, we take the time to understand your business and partnership dynamic. We give you impartial advice and quotes from the top 5 life companies in Ireland, and tailor the need and advice to a solution best suited to you.
While Partnership Insurance of course cannot lessen the emotional blow and trauma caused by the death of a colleague, it can certainly help to minimize the financial impact.
Why not take the next step and book a consultation. Or if you would like further information about Business Protection or Partnership Insurance, please feel free to get in touch.