1. Business Continuationand
Succession Planning

2. Where will you find answers?
Let McLean Insurance help you craft a detailed plan through careful review and evaluation of
your business and your role in it. Our team can steer you through these complex issues with
ease, foreseeing pitfalls and building a solid foundation to prepare for the future.
As part of our initial consultation, McLean Insurance works with you to identify which
employees are “key” and what impact their departure might have on the company. During an
extensive fact-finding phase, our team pulls together all pertinent information on financial,
legal, and operational details. These efforts enable us to identify known and potential risks
from the loss of a key person for any reason. As a result, we can put together a comprehensive
plan for business continuation.
Have you taken the time to ask
these important questions?
What will happen to your business after you’re gone?
Do you have a clear plan in place to ensure your legacy
is a strong viable business?
Who will step into positions of leadership and ownership?
How will you make sure your company can weather the
transition, which may take years to be resolved?

3. Key Person Protection
When you’re running a business, it’s easy to get caught up in the day-to-day work:
hiring employees, increasing sales, meeting payroll, etc. But for the longevity of that
business, it’s important to think ahead—not only about long-term marketing, but
about what will happen if one day you are no longer able to run the business.
In a company with a handful of key people, whether they are owners or executives,
you don’t want to wait to plan for the future. Look around. Who is crucial to your
company’s success? Who handles key clients? Who manages the employees? Who
generates new sales revenue? If that person were suddenly not around, would your
company be able to withstand the transition to new leadership?
Our advanced business review team, comprised of attorneys, CPAs, and business
review specialists, identifies the personnel who are key to the prosperity of your
business. They assess the liquidity needs resulting from the loss of each key person
and produce a report detailing the most appropriate and cost-effective response to
those needs—all while the business continues to run smoothly.
Key person protection involves a variety of strategies: With prudent foresight,
properly structured insurance products, and additional methods, your company will
have the liquidity to thrive, despite the loss of a key person for any reason. This could
be an unexpected death or disability, a personal matter, a career change or any
other reason. Your business will have the funding it needs to maintain operations.
Incidentally, keeping your company well-funded during the transition makes it more
appealing to prospective leadership. Simply having a plan in place can instill
confidence in current and potential clients or partners who are assured they are
doing business with a company that will weather unexpected events with ease.
BusinessContinuation

4. Buy-Sell Agreement
One of the best actions you can take to provide for the continued success of your business is a
funded buy-sell agreement between owners and/or prospective successor owners in your
company. A buy-sell agreement is a legally binding document that spells out what will happen
when a triggering event, such as the death or disability of a business owner, occurs. The agreement
may also come into play with the retirement, resignation, or termination of a key person.
The benefits of using such an agreement are many, but they all lead to a smooth transition with
the least impact on revenue and the most equitable treatment of all interested parties. A fair
valuation method and the structure of future ownership are determined as part of the agreement,
so the rancor and litigation that can follow the loss of a key person are avoided entirely. This
ensures that there will also be no disruption to the business itself.
McLean Insurance works with your company and with your advisors, including attorneys and
accountants. If you need a referral, we will make one to a qualified, experienced professional.
Together, your advisory team will determine how to best structure your agreement and the
funding mechanism that will provide the best legal and tax outcomes for all parties.
SuccessionPlanning
of small businesses
make it through the
FIRST FIVE YEARS*
50%
of family-owned
businesses survive to the
NEXT GENERATION*
30%
Only half of those that
make it to the second
generation, make it to
THE THIRD*
of business owners
agree they need a
SUCCESSION PLAN**
90%
A significant percentage
of those who said they had
a plan conceded they
DO NOT have it
IN WRITING**
say they DO NOT have a
viable SUCCESSION PLAN**
60%
MORE THAN
In surveys of small
businesses, more than
*National Federation of Independent Businesses
**The Retirement Source
SMALLBUSINESSSURVIVALRATESSMALLBUSINESS–SUCCESSIONPLANS

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6. Let’s take it step by step.
The Process
Business Continuation
First,wewillgatherallpertinentinformationaboutyourcompany,including
yourexistingoperating/shareholderagreement,recentfinancialreportsand
anyexistinginsurancepolicies.Wethenworkwithourbusinessreviewteam
(consistingofattorneys,accountants,andfinancialadvisorsfromourtrusted
businesspartners)tocreateacomplimentaryreviewofyourexisting
operatingagreement,completewithbusinesscontinuation-specific
recommendationstotakebacktoyourexistingcounsel.
Second, our team will provide you with a complimentary, informal business
valuation report that estimates the worth of your company. This not only
gives you a general idea of the current value of the company but also a
method through which you can determine the value of your business at
the time when an equity stakeholder is lost. This informal valuation
provides your first look at the amount of funding necessary to execute
the terms of your buy/sell agreement.
We will then meet with you to review the reports and discuss the
recommendations of our business review team. We coordinate with your
existing legal and/or tax advisors to ensure that a solid continuation and
succession plan is in place, one that covers all contingencies and scenarios.
We then review with you the most cost-effective ways to provide the
funding that is necessary to execute the continuation and succession
plan as intended.

7. How Will Your Company Respond to a Catastrophic Event?
Business continuity planning is a clear, concise roadmap that allows your business to
continue operations after a catastrophic event, such as a fire, explosion, or natural
disaster. If a fire breaks out and the sprinkler system goes off in your IT department,
what happens to all your data? Even if you’re on the fifth floor, a flood can cause
electrical damage to your systems that could jeopardize your business. Taking the
right steps beforehand helps keep you in business by ensuring that critical functions
are available to customers, suppliers, regulatory and other entities.
Backing up your data, or Disaster Recovery, is an essential first step, but is it enough?
Experts agree that it is only the first step in continuity planning. According to IBM, 90%
of all companies—big or small—that do not have Business Continuity Plans will go
out of business within two years of an event. It only takes a few hours to think through
what would happen if they lost power, experienced a cyber attack, or had an employee
perish, etc. What is needed to continue to run your business—and plan for those
events, one of which will eventually affect your company. Every business experiences
a disaster every five years, approximately. That is a fact!
The second step is to understand what risks are specific to your company. We ask the
important questions about what might endanger your company and how well you are
prepared to respond. Even with Disaster Recovery, your company may not survive a
disaster. What is the one common denominator among people you see on the news
who have survived a fire, flood, attack, or other disaster? They never imagined such a
thing could happen to them! Are some people better prepared than others? Yes, they
know who to call, how to keep the business going, what resources are needed, etc.
These people have put a Business Continuity Plan in place.
Once the risks specific to your company are identified, we recommend engaging our
business partner. They have helped thousands of companies like yours prepare for the
inevitability of a disastrous event by providing a simple Business Continuity Plan.
These plans include messaging to help you in the event of a cyber-attack and backing
up all your data in one secure location that is easily accessed on the internet. For
many companies, your key Supply Chain partners and Public/Private Sector partners
are included in your plan.
History shows that businesses that proactively plan for business continuation enjoy
preferred underwriting by insurance companies and experience significantly lower
frequencies of business interruptions than companies that fail to plan. Call McLean
Insurance and speak to an advisor today.
The world is unpredictable, let us help keep your business safe!
Business Continuity Planning
Business Continuity Planning

8. Is the valuation of the company an important component of Business
Continuation planning?
Yes. The most important component to building a plan for the future of your company
after a key person’s departure is determining a fair pricing method for the company.
Creating that plan now allows all owners to find agreement on the purchase price
before the triggering event. When that event takes place the transfer of equity between
surviving owner(s) and departed owners’ heir(s)–is smooth and without conflict.
What professionals will McLean Insurance work with to develop a solid buy-sell
agreement as part of your business continuation plan?
At least three professionals should be involved in the creation of your Business
Continuation Plan:
• An attorney with experience in business planning, as well as estate planning
• An accountant familiar with your company and the market it serves
• An insurance advisor well versed in the use of life and disability insurance
that fund buy-sell agreements
How does a company afford to pay an owner who becomes disabled and is
unable to work?
For most companies, paying an owner who has been disabled is not a hardship for a
short period. But an owner or key person who has long-term or permanent disability
can drain a company’s resources significantly, especially if that company hasn’t
prepared for a smooth, well-funded transition. It’s best to foresee such a possibility
with a strong plan in place and disability insurance to ensure these payments are
not a drain on company funds.
Are there other areas in which McLean Insurance can assist my company and/or
my employees?
Yes. There are several other areas where our agency can work with your company
and employees. Our Personal Lines Department can assist employees and owners
with insurance for their home, auto, umbrella and other specialty products. Our
Commercial Lines Department can provide advice and solutions in the areas of
liability, workers comp, errors & ommissions, among many others. Our Life & Benefits
Department can work with both owners and employees to review their overall
needs and existing coverage in the areas of life, disability, long term care, and health
insurance. This allows you to provide a valuable benefit and service to your
employees with absolutely no cost to the business.
Frequently Asked Questions
Business Continuation