How Do I Value My Company Shares for Shareholder Protection Insurance?

I want to ensure my family are able to realise the value of my share in our business should the worst happen. I’ve therefore been looking at Shareholder Protection Insurance. However, I need to know how I can ensure my valuation is suitable?

Question asked by Gurbaag Chadda

For businesses with more than one shareholder, people often choose to protect their shareholding, as well as the shareholdings of their fellow partner(s), with Shareholder Protection Insurance.

This protection is not just for the business. It also offers financial help to the family of a deceased shareholder who inherits the shares in the business after their loved one passes away.

How Do I Value Company Shares for Shareholder Protection?

There are various methodologies to valuing a business depending on its type and size.

We often work in consultation with your accountant to place a suitable value on your business and your shareholding.

One of the most commonly accepted methods of valuation is applying a multiple of net profit of the company. You then base your Shareholder Insurance on your proportion of the total shareholding you own.

However, there are also other ways to value a business depending on its size and the number of shareholders. For example, an adviser may examine:

  • Cashflow.
  • Profits (whether they’re static or growing).
  • Multiples of net profit plus cash in bank and assets (however, this is tricky for startups and newer companies).
  • Intangible factors will also play a part, such as the company’s reputation and relationship with clients.

However, this isn’t a strict set of guidance. Every company is different and the value of two companies, even within the same industry with similar metrics, can be very different.

If you’re unsure about the value of your business, we’ll work with you to find the most appropriate metric to use.

I had a great experience with Drewberry, they have a lot of knowledge and expertise with life insurance and income protection and were able to advise me and arrange suitable products. Highly recommend.

Lachlan Mellings
12/08/2020 Logo
Compare Top 10 UK Business Insurers
Takes approx. 60 seconds
  • £

Or call us on 0208 432 7333

Compare Top UK Insurer Quotes Logos
What is a P11D or Benefit in Kind?
Is company-paid insurance taxable? For more on the taxation of Business Health Insurance, Group Income Protection, Death in Service or Group Critical Illness Cover, we cover P11D forms, PAYE tax and Benefits in Kind.
Who Are The Best Relevant Life Insurance Providers?
Who are the best Relevant Life Cover providers? There are many UK insurers who offer Relevant Life Cover, the policy is very similar across the board however some offer a number of additional benefits....
How Much Key Man Insurance Do We Need?
Once you've determined that your business needs cover, the next thing to do is work our how much Keyman Insurance you need. But how do you do this? Read on to find out...
What Does Group Critical Illness Insurance Cover?
Which serious illnesses does Group Critical Illness Insurance cover? Group Critical Illness Cover protects against a set of 'core' critical illnesses with the option to add additional cover for further conditions. But which illnesses are covered?
What Is The Eligibility Criteria For Relevant Life Insurance?
Who can have relevant life insurance? I am a company director and I'm looking for some life insurance and came across relevant life cover and wanted to know more...
What is a Participating Employer for Employee Benefits?
I'm looking into sorting out some employee benefits for my staff. During the process, I've come across the term 'participating employer'. What is a participating employer in relation to employee benefits? Do I need to worry about this?
Contact Us
Head Office & Pensions and Investments
Senator House
85 Queen Victoria Street
Personal Insurance & Accounts Payable
Telecom House
125-135 Preston Road
Drewberry London Office MapDrewberry Brighton Office Map
Our Core Principles
  • 1You Come FirstWe are a client focused business who always aim to put you first.
  • 2We are ExpertsTo provide you with the best advice, we need to know our stuff!
  • 3We are HumanWe are real people with feelings who are here to help you.
  • 4We are ProfessionalProviding a 5-star service requires a professional approach to everything we do.
  • 5We are here to EducateWe don't believe in sales, we are here to educate so you can make informed decisions.
Finalist - Moneyfacts AwardsFinalist - Cover Excellence AwardsHighly Commended - Protection Review Awards
Proud member of AMII (Association of Medical Insurers & Intermediaries)Proud member of Money Advice ServiceProud member of UnbiasedProud member of BIBA (British Insurance Brokers' Association)

If you are unhappy with our service, we have a complaints procedure, details of which are available upon request. If you are unhappy with how your complaint has been dealt with, you may be able to refer your complaint to the Financial Ombudsman Service (FOS). The FOS website is

Drewberry Ltd is registered in England and Wales. Companies House No. 06675912

Drewberry Ltd registered office: Telecom House, Preston Road, Brighton, England, BN1 6AF. Telephone 0208 432 7333

Drewberry Ltd (Financial Conduct Authority No. 505473) is an Appointed Representative of Quilter Wealth Limited and Quilter Mortgage Planning

Limited, which are authorised and regulated by the Financial Conduct Authority.

Cookie Use

Drewberry™ uses cookies to offer you the best experience online. By continuing to use our website you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacycookie policy.