Overhead Expense Disability Insurance

overhead-expense-disabilityBusiness Overhead Expense (BOE) disability insurance pays the insured’s business overhead expenses if he or she becomes disabled. A BOE policy pays a monthly benefit based on actual expenses not anticipated profits. It is designed for businesses that rely on a small number of people (or one person) to produce revenue.

The following business overhead expenses are typically covered by a BOE disability policy:

  • Rent
  • Interest payments on some business debts
  • Utilities
  • Employees’ salaries and payroll taxes
  • Postage and stationery
  • Equipment maintenance
  • Rental, lease, or depreciation of office equipment
  • Taxes on the business property location
  • Insurance premiums for Workers’ Compensation, employee medical, and liability
  • Accounting fees
  • Professional memberships and subscriptions

BOE policies do not cover the salary of a temporary employee hired to do the duties of the disabled. Income taxes, the cost of inventory, and the cost of furniture are some expenses that are not covered.

BOE coverage is affordable. Rates can run from $50 to $100 per month for coverage up to $10,000 per month in case of disability. The premiums are based on health, lifestyle, and age factors. The premiums are tax deductible as a business expense.

There are key things one must have in this policy and we always suggest that our clients not always purchase the cheapest policy. We seek high quality insurers with a high financial rating and strong customer satisfaction rating for our clients and always look for the following in a policy for our clients:

  • Coverage for Partial Disability – We make sure the policy has residual benefits or a residual rider to cover partial disability.
  • The Ability to Purchase More Coverage – Expenses may grow while the professional’s insurability (age and health) declines.
  • A Carry-Over Provision – If you have variable expenses that fluctuate, you will want carry-over coverage that will allow you to take unspent benefits from one month into the next.

When you are considering overhead disability insurance, look to us here at SIG to locate you the best policy that fits the needs of your key executives and your organization. There are a myriad of overhead disability policies out there, and we pride ourselves in working directly with our clients to understand their needs. Contact Us or Request A Quote and we will be in touch with you right away!