Business InsuranceBusiness Succession (Buy/Sell) 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.
Life Insurance
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Income Protection
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TPD Insurance
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Critical Illness
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Needlestick Cover
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Key Person
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Business Succession
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ADAWA Partner
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Life Insurance • Income Protection • TPD Insurance • Critical Illness • Needlestick Cover • Key Person • Business Succession • ADAWA Partner •
01What 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.
02Common trigger events
Death
Retirement
Permanent disability
Permanent relationship breakdown
Serious illness / trauma
Loss of professional licence
03How 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
04Ownership 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.
COMMON TRIGGER EVENTSWhat a buy/sell agreement has to anticipate.
A funded agreement decides in advance what happens to ownership, before anyone is under pressure.
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 knowingIllustrative 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.
Why Covered LifeAdvice 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.
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Coordinated advice
We work alongside your solicitor and accountant, not around them.
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Funding structured to the agreement
Cover sized and structured to match the actual terms of your buy/sell arrangement.
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Ownership guidance
We explain the trade-offs between self-ownership, cross-ownership and trust structures.
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Reviewed as the business grows
Valuations change we help keep the funding aligned to the business's actual worth.
Side by sideWhat changes when it is funded
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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
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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 mattersCover 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.
are admitted and paid
are admitted and paid
and paid
Also worth consideringCover that works alongside this
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01
Life Insurance
A lump sum for your family to clear debts and maintain their lifestyle if you pass away.
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TPD Insurance
A lump sum if illness or injury leaves you permanently unable to work.
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Critical Illness
A lump sum on diagnosis of a serious condition like cancer, heart attack or stroke.
Common questionsAnswers, without the jargon
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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.
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Death, permanent disability and serious illness are the most common health-related triggers; some agreements also address retirement, licence loss or relationship breakdown.
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Yes, though it involves some additional considerations compared with life and TPD cover — your adviser can walk you through these.
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It depends on your business structure — options include self-ownership, cross-ownership, an insurance trust, or the operating entity, each with different tax implications.
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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.
Ready when you areGive your business partnership a funded plan
Speak to our specialists today for a free, no-obligation quote.