The Silent Threat of Disability to Ultra-Successful Clients

Success isn’t just measured in revenue or profits. For corporations, business owners, private equity firms, and ESOPs, overlooked contractual obligations can pose significant risks - especially when a key individual becomes disabled. Without proper planning, the financial consequences can be devastating.

Here are key scenarios where proactive disability planning is essential:

Disability of a Key Person

A CEO or top executive’s disability can disrupt business operations, even when life insurance is in place. Expanding coverage to include disability protection ensures the company can navigate temporary or permanent leadership gaps.

[Blog]: Your Key Person Strategy Has a Blind Spot - Here's How to Fix It

Disability of a Business Owner in a Buy-Sell Agreement

Traditional buy-sell agreements often focus on death, leaving businesses vulnerable if a partner becomes disabled. Customized disability coverage can fund equity buyouts without jeopardizing financial stability.

[Case Study]: Buy-Sell Disability Policy of Large Commodities Firm

Disability of a Borrower

Entrepreneurs leveraging loans for growth face personal repayment obligations. Loan indemnification disability insurance protects both the borrower and the business by covering debt obligations during a disabling event.

Disability During Severance

Executives receiving post-termination benefits may lose group disability coverage upon leaving. Tailored severance disability policies safeguard both the individual’s benefits and the organization’s financial stability.

Disability of an ESOP Shareholder

Disabilities in key Employee Stock Ownership Plan (ESOP) participants can trigger repurchase obligations and threaten company stability. Guaranteed-issue ESOP disability insurance provides lump-sum funding to preserve long-term plan health.

Disability is often a silent saboteur in contracts that can derail even the most successful businesses. Sophisticated advisors who anticipate these risks and implement tailored solutions deliver true value to their clients.

This post was adapted from the published article as seen in Insurance News Net written by Sean McNiff, VP of Business Development & Marketing at Exceptional Risk Advisors.  You can read the full article here.