HCC Specialty
401 Edgewater Place, Suite 400, Wakefield, Massachusetts 01880
main 781 994 6000
facsimile 781 994 6001
The ‘Irreplaceable Employee’ needs to be replaced…now what? They’re called moguls, head honchos, rainmakers, and captains of industry. They are pioneers in their respective trades hailing from a variety of backgrounds. Maybe they graduated with top honors from a prestigious university, or maybe they never finished high school. Some have built their company from the ground up, while others got their start in the mailroom and climbed to the top of the organizational hierarchy. Regardless of how they got there‐‐‐they got there and proceeded to take their company to the next level. Their presence has an unmistakable influence on the success of the companies they run, and the abrupt loss of such a person would have an undeniable effect on the business’ long term forecast. Companies rely on the health and well‐being of its employees in order to continue on the path of growth and success. This is especially true when it comes to company leaders. Unfortunately, health and well‐being can change in an instant while the corporate structure needs time to transition. Instantaneous change to an organizational structure can be a difficult predicament with significant financial ramifications to possibly ensue unless there is a well‐defined succession plan in place. Prepare for the unexpected because it will surely happen when you least expect it ‐‐‐ Lorrin L. Lee So for risk managers responsible for succession planning the “$64,000 question” is this: how do you replace the ‘irreplaceable employee’? Acquisition of such talent is no small feat. Protecting an organization’s human capital exposure against the injury, illness or death of top talent can be a full‐time job in and of itself. According to PwC (2013), “Directors continue to recognize the importance of effective strategic planning and are allocating their time accordingly.” Furthermore, “Directors and investors both include strategic planning, risk management and succession planning in their top five lists of important issues for board focus during the coming year.” Buy‐Sell agreements, key person insurance and critical asset protection are an intricate part of a robust business continuation strategy. These practical insurance solutions can help aid an orderly transition in the event of the untimely death or permanent disability of an “irreplaceable.” Key person disability insurance is an accident and sickness policy purchased by a third‐party to help provide, for up to 24 months, the necessary funds to keep the company afloat while a suitable replacement is hired. Buy‐Sell disability insurance is a valuable resource for business partners to protect the business and its continuity against the permanent and total disablement of one partner. In the event of a loss, the active partner will receive a lump sum payout in order to purchase the disabled partner’s share of the business. Critical asset protection (CAP) is a unique insurance solution that can be beneficial for those involved in the succession planning process ‐‐‐especially when life coverage is needed immediately. The policy covers against death by any cause and can be underwritten within one day. CAP is an ideal solution for interim coverage while life insurance is being underwritten. Moguls, head honchos, rainmakers – call them what you may – these strong leaders have a profound impact on a company’s work environment and the proverbial bottom line. When such a leader suffers a career‐ending disability or unexpectedly dies there is undoubtedly a void to fill. What one person brings to the table is not necessarily found easily in another person. However, such leaders will tell you ‐‐‐ the show must go on. Such leaders have built a corporate culture that transcends their leadership. That ‐‐‐ coupled with a solid succession plan ‐‐‐is truly how a company can replace the irreplaceable. To expect the unexpected shows a thoroughly modern intellect ‐‐‐ Oscar Wilde Please contact us to discuss your insureds’ specialty insurance needs Mark Barry Kathy Bouras Senior Vice President of Sales & Marketing Vice President of Prestige Underwriting (781) 994 6251 (781) 994 6000 [email protected] [email protected] In addition to our high limit disability insurance program, HCC Specialty also offers the following: * Event cancellation * Prize indemnity/promotional * Sports and recreation facilities * Kidnap and ransom * Restaurant recovery * Special event liability * Product contamination * Weather insurance * Musical instrument * Miscellaneous professional liability * Employment practices liability * Architects and engineers professional liability * Public risk Explore our website and see how HCC Specialty can help you and your organization. About HCC Specialty Headquartered in Wakefield, Massachusetts, HCC Specialty is among the industry's leading managing underwriters of innovative specialty insurance products, including: high limit disability, professional liability, public entity, crisis management, contingency, DIC, prize indemnity, primary and excess casualty, and special program business. HCC Specialty, a division of HCC Insurance Holdings, Inc., is comprised of HCC Specialty Underwriters, Inc., Professional Indemnity Agency, Inc., G.B. Kenrick & Associates, Inc. dba Kenrick Corporation, InsPro Corporation and HCC Public Risk. For more product information, please visit our website. HCC Insurance Holdings, Inc. (NYSE: HCC) maintains some of the highest financial ratings available within the insurance industry AA
by Standard & Poor's
AA
by Fitch Ratings
A+
by A.M. Best Company
HLD 001 (8.14)
HCC Specialty Underwriters, Inc. is a member agency of HCC Specialty,
a division of HCC Insurance Holdings, Inc.