Baron 55 flight instructor reported engine failure and diversion to a nearby airport.

Narrative

Departed ZZZ VFR for ZZZ1. Three pilots on board. Student in the left seat. A complete runup was performed before takeoff. After takeoff we checked in with ZZZ approach for VFR flight following to our destination. The plane was level at 5500 MSL and we were talking with ZZZ1 Approach. I was in the right seat as PIC and Instructor. We experienced a fluttering sound. We couldn't identify what it was at first. All the engine indications appeared to be normal. About 5-10 seconds later a loud pop was heard and the front windscreen was cracked by the pilots head and oil was all over the left engine nacelle. The engine appeared to still be producing power but we identified it as the problem and shut the engine down and performed the engine shutdown emergency checklist. I as the instructor took control of the aircraft.We notified ZZZ Approach and diverted into ZZZ2 as this is our maintenance repair facility and was only about XX miles away. We safely landed the Baron at ZZZ2 and called the ZZZ3 tower and told them we were on the ground. They got some basic info. The left engine has a hole on the crankcase. It is catastrophic engine failure. We had no issues that I can recall but wanted to fill out a report for the record. We used CRM; ATC; Checklist and brought the airplane down successfully. We did not file a flight plan. The crack in the windshield is from a piece of the engine that flew out hit the windshield.