In the event of suffering a trauma, death or disablement of you or your business partner, a preferred option might be to have the unaffected partner purchase the other partner's equity in the business at a pre-agreed price, funded by the proceeds of an insurance policy.

Without appropriate insurance the remaining partner may not be in a position to fund the purchase, and if they are, they may not agree with the value placed on the business by the other party or their estate.

A replacement partner may be another alternative, however they will need to be accepted by the remaining partner and protracted delays may result.

If disputes arise, the ultimate outcome could be that the business might have to be sold, but in the meantime unit owners may become concerned, valued customers may go elsewhere and employees may leave because of uncertainty.

Without partnership insurance, the death or disability of a business partner can spell the death of the business.

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