Business Overhead Expense Insurance

This insurance covers the day-to-day operating expenses of a business, such as rent, utilities, employee salaries, and equipment leases, when an owner or key employee is unable to work due to disability. It helps maintain business continuity during this period.

There are three main types: Key Person Disability Insurance, which covers losses from the disability of a vital employee; Buy-Sell Disability Insurance, which facilitates the transfer of ownership if a business owner becomes disabled; and Business Overhead Disability Insurance, which covers ongoing business expenses during the disability of an owner or key employee.

Benefit periods vary but often last for 12 to 24 months, providing a temporary bridge until the owner recovers or the business adjusts.

The benefit amount is based on the business's regular monthly overhead expenses and is determined at the policy's inception.

Covered expenses often include rent, utilities, employee salaries, insurance premiums, and loan payments, but exclude the owner's salary.

While personal disability insurance provides income to the individual, BOE Insurance covers the business's operational expenses during the owner's disability period.

It's ideal for small to medium-sized business owners, especially where the business is highly dependent on the owner's ability to work.