Business Overhead Expense Insurance
Business overhead expense insurance is designed to help qualifying business owners pay eligible operating expenses during a covered disability, keeping the business running while the owner recovers.
If the Owner Is Disabled, the Bills Continue
When a business owner becomes disabled, their personal income may stop, but the business's obligations do not. Rent, payroll for staff, utilities, leases, and other operating expenses keep accruing. Without the owner generating revenue, those costs can quickly erode the business or force a sale.
Business overhead expense coverage is designed to pay those eligible expenses during a covered disability, buying the owner time to recover and return.
What It Covers
Eligible expenses typically include the regular operating costs of running the business, such as rent or mortgage on the business premises, employee salaries (but not the owner's draw), utilities, lease payments, insurance premiums, and certain administrative costs.
It does not replace the owner's personal income. That is the role of individual disability income coverage. The two are complementary: one keeps the business open, the other keeps the household going.
How It Differs From Personal Disability Income
Personal disability income insurance pays benefits to the owner for personal income replacement. Business overhead expense insurance pays the business for its eligible operating expenses. The distinction matters because the needs are different: a household needs income, a business needs its bills paid.
A complete plan for an owner often pairs both, so that the business survives and the household is supported during the same disability.
Benefit Periods and Limits
Business overhead expense policies typically have shorter benefit periods than personal coverage, often twelve to twenty four months, on the reasoning that the owner will either recover, sell, or restructure the business within that time. Benefits are usually capped at a monthly limit based on the business's actual expenses.
Our Approach
We review the business's actual overhead expenses to set an appropriate monthly benefit, then coordinate this coverage with the owner's personal disability income protection. The goal is a plan that keeps both the business and the household intact through a disability.