Business Insurance

Business Succession Insurance

When more than one person owns a business, there needs to be a plan for what happens to each person's share whatever the circumstances. Succession insurance funds that plan.

Get A Quote
Talk to us 
01

What business succession insurance is

Sometimes called a succession plan or "business will," a buy/sell agreement is a legal arrangement that sets out what happens to an owner's share of a business on a defined trigger event death, permanent disability, a serious illness, retirement, or the breakdown of the relationship between principals. It covers how the business will be valued, who buys the departing owner's share, and critically how that purchase will actually be funded.

A man in glasses and a light blue shirt smiling and looking at an elderly person with gray hair, who is seated next to him. They appear to be engaged in a conversation or meeting in a professional setting. 
02

Common trigger events

A patient lying in a hospital bed with a bandaged head, wearing a nasal oxygen tube and an intravenous drip, in a hospital room.

Death

Retirement

Permanent disability

Permanent relationship breakdown

Serious illness / trauma

Loss of professional licence

How insurance funds the agreement

For health-related trigger events death, TPD or a defined trauma condition life insurance is one of the most reliable ways to fund the buyout, alongside the legal agreement itself. Life cover and TPD insurance are generally straightforward to arrange for this purpose; trauma insurance can also be used, though it comes with a few extra considerations your adviser will walk you through. The insured amount should reflect the value of the departing owner's interest, plus associated costs like CGT, stamp duty or legal fees connected to the transfer.

Without a funded agreement

  • Remaining owners may need to find a large sum quickly, often under pressure

  • A departing owner's family may be forced to stay involved in a business they didn't choose

  • Valuation and terms are negotiated in the middle of a crisis, not agreed calmly in advance

With a funded buy/sell agreement

  • The purchase price is ready as a lump sum the moment it's needed

  • Ownership transfers cleanly, on terms already agreed by everyone

  • The departing owner or their family receives fair value without delay or dispute

A healthcare professional in a white coat and stethoscope writing on a clipboard while sitting at a desk, with a patient's hand visible in the foreground. 
03
04

Ownership structures

There are several ways a buy/sell policy can be owned each principal self-owning a policy on their own life, cross-ownership between principals, ownership through a dedicated insurance trust, or ownership by the business entity itself. Each option carries different implications, particularly for capital gains tax, and the right structure depends on your specific business and ownership arrangement.

Three diverse professionals smiling and having a conversation in a modern office, holding papers and a tablet. 
COMMON TRIGGER EVENTS

What a buy/sell agreement has to anticipate.

A funded agreement decides in advance what happens to ownership, before anyone is under pressure.

Two men in business attire shaking hands in an office setting.

Trigger events should be defined in the agreement itself, not assumed.

Death

Retirement

Permanent disability

Permanent relationship breakdown

Serious illness / trauma

Loss of professional licence

Worth knowing

Illustrative example

A clinic's founding principal responsible for the majority of its revenue and long-standing patient relationships is unexpectedly diagnosed with a serious illness and can no longer work. Patient bookings drop sharply, and the clinic struggles to find a replacement of the same calibre.

Close-up of a person’s hand holding a medical device with an IV line attached, a bandage around the finger, and a hospital or clinical setting in the background. 
Why Covered Life

Advice that actually fits your life

We are not a call centre. Every policy is structured around your circumstances, and we stay with you through to claim.

  • Icon of a hand holding a smartphone with chat bubbles above it.

    Coordinated advice

    We work alongside your solicitor and accountant, not around them.

  • Outline of a hand holding a coin with a dollar sign.

    Funding structured to the agreement

    Cover sized and structured to match the actual terms of your buy/sell arrangement.

  • Line drawing of a directional signpost with four arrows pointing in different directions.

    Ownership guidance

    We explain the trade-offs between self-ownership, cross-ownership and trust structures.

  • Outline of a speech bubble containing a pencil and lines, representing editing or writing.

    Reviewed as the business grows

    Valuations change we help keep the funding aligned to the business's actual worth.

Side by side

What changes when it is funded

  • Without a funded agreement

    Remaining owners may need to find a large sum quickly, often under pressure

    A departing owner's family may be forced to stay involved in a business they didn't choose

    Valuation and terms are negotiated in the middle of a crisis, not agreed calmly in advance

  • With a funded buy/sell agreement

    The purchase price is ready as a lump sum the moment it's needed

    Ownership transfers cleanly, on terms already agreed by everyone

    The departing owner or their family receives fair value without delay or dispute

1 in 4

Australian mortgage holders are at risk of mortgage stress. Income shock, not interest rates, is often the trigger.

Source: Roy Morgan, April 2026.

Why it matters

Cover pays out, and pays out often

Life insurance in Australia is closely regulated and the claims genuinely get paid. These are the most recent admitted claim rates published by APRA and ASIC.

97%
of advised death cover claims
are admitted and paid
94%
of income protection claims
are admitted and paid
83%
of TPD claims are admitted
and paid
Source: APRA and ASIC Life Insurance Claims and Disputes Statistics, 12 months to 21 December 2025. 
Also worth considering

Cover that works alongside this

  • A young man with glasses and a blue shirt leaning forward and smiling, shaking hands with an older woman with gray hair, also smiling, in a room with white walls.

    01

    Life Insurance

    A lump sum for your family to clear debts and maintain their lifestyle if you pass away.

    Learn More
  • A happy family of four, including a father, mother, and two children, sharing a moment of affection and joy while sitting on a beige couch in a cozy living room.

    02

    TPD Insurance

    A lump sum if illness or injury leaves you permanently unable to work.

    Learn More
  • A doctor taking the patient's pulse with a stethoscope and holding an X-ray scan, patient lying on hospital bed with blue patterned sheet.

    03

    Critical Illness

    A lump sum on diagnosis of a serious condition like cancer, heart attack or stroke.

    Learn More 
Common questions

Answers, without the jargon

  • A legal agreement between business owners that sets out how an owner's share transfers to the remaining owners on a defined trigger event, and how that transfer is valued and funded.

  • Death, permanent disability and serious illness are the most common health-related triggers; some agreements also address retirement, licence loss or relationship breakdown.

  • Yes, though it involves some additional considerations compared with life and TPD cover — your adviser can walk you through these.

  • It depends on your business structure — options include self-ownership, cross-ownership, an insurance trust, or the operating entity, each with different tax implications.


  • Yes — the legal agreement and the insurance funding need to work together, so your solicitor and accountant should be involved alongside your adviser.

Still not sure? A short phone call usually clears it up faster than reading another page.

Talk to us
Talk to us 
Ready when you are

Give your business partnership a funded plan

Speak to our specialists today for a free, no-obligation quote.

Get A Quote
Get A Quote
Talk to us
Talk to us