Business overhead expense disability insurance

Business Overhead Expense Disability Insurance

Business Overhead Expense (BOE) Disability Insurance is a specialized type of insurance designed to cover the overhead expenses of a business in the event that the owner becomes disabled and is unable to work. This type of insurance is crucial for small business owners who are integral to the daily operations of their business.

Overview

BOE insurance provides coverage for the fixed expenses of running a business, such as rent, utilities, employee salaries, and other operational costs. It ensures that the business can continue to operate smoothly even if the owner is temporarily unable to contribute due to a disability.

Key Features

• Coverage: BOE insurance typically covers expenses such as rent, utilities, employee wages, property taxes, and other fixed costs. It does not cover the owner's personal income.
• Benefit Period: The benefit period for BOE insurance is usually shorter than personal disability insurance, often ranging from 12 to 24 months.
• Elimination Period: This is the waiting period before benefits begin, typically ranging from 30 to 90 days.
• Premiums: Premiums for BOE insurance are generally tax-deductible as a business expense.

Eligibility

To qualify for BOE insurance, the business owner must be actively involved in the day-to-day operations of the business. The policy is designed for small business owners, including sole proprietors, partners, and small corporations.

Benefits

• Business Continuity: Ensures that the business can continue to operate and meet its financial obligations during the owner's disability.
• Employee Retention: Helps retain employees by ensuring their salaries are paid even if the owner is unable to work.
• Financial Stability: Protects the business from financial strain and potential closure due to the owner's inability to work.

Considerations

When selecting a BOE insurance policy, business owners should consider the following:

• Coverage Limits: Ensure the policy covers all necessary expenses.
• Benefit and Elimination Periods: Choose periods that align with the business's financial needs.
• Exclusions: Understand what is not covered by the policy.

Also see

• Disability Insurance
• Business Insurance
• Small Business Administration
• Risk Management