Business Overhead Expense (BOE) insurance reimburses a business owner for business expenses incurred during a disability. This coverage helps business owners keep their businesses running when they are too sick or hurt to work. Covered expenses are typically those that are deductible for federal income tax purposes, such as premiums for malpractice insurance, mortgage/rent, salaries, utilities, water, and more.
If you are a primary revenue generator for your business, what would happen if you couldn’t work? Would you be able to cover your expenses? Would you have to sell your business quickly (potentially for less than it’s worth)? Would you have to close the business? Disability overhead expense insurance gives you time to cover the bills while you recover. With your expenses covered, you have time and the peace of mind to deeply consider the next steps for your business.
What Kind Of Businesses Purchase Disability Overhead Expense Insurance?
Disability overhead expense insurance typically covers small businesses that can demonstrate regular expenses that would be covered by a policy. These include anything that would be a normal and customary expense in the continuing operation of your business. Small dental and medical practices, law, accounting firms, or architecture firms are just some examples of businesses that would typically get disability overhead expense insurance.
How Long Does Coverage Last?
Once you’re insured, you can typically keep a disability overhead expense insurance policy in place until you’re 65. Some insurers allow you to extend coverage beyond age 65, if you meet certain criteria. Policies typically have a 12- or 24-month benefit.
What Else Should I Know About Disability Overhead Expense Insurance?
Premiums for disability overhead expense insurance are tax deductible. To get disability overhead expense insurance coverage, your business can employ no more than 10 professionals (doctors, dentists, engineers). If you have another type of business, like retail or a small manufacturing company, you can’t employ more than 20 people.