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What is Business Overhead Expense Insurance?

Business overhead expense insurance (also known as disability overhead expense insurance) is an insurance policy that covers the cost of running your business in the event that you become disabled or sick and are unable to work to pay the cost. Here, the insurance professionals at Unity Insurance discuss how business overhead expense (BOE) insurance works and who is eligible, as well as timeframes to be mindful of. 

How Does Business Overhead Expense Insurance Work?

For small business owners, not being able to operate, even for a couple of months, can have a disastrous impact on your company’s finances. With BOE insurance, you can have peace of mind that your operating expenses are covered so your business does not skip a beat while you are unable to work. 

BOE Insurance covers a range of operating expenses that are considered customary expenses. The list below includes some of the most common expenses that are covered in a BOE policy:

  • Wages – This includes employee salaries, payroll taxes and contributions towards benefits that your business provides.
  • Office Expenses – This covers the costs of utilities such as electricity, telecommunications, heat and water.
  • Real Estate – This covers any costs associated rent payments, mortgage payments and property taxes.
  • Business Insurance Premiums – Your property and liability premiums, as well as any employee life insurance or disability insurance premiums, are covered under a BOE policy as well.

Who Qualifies for Business Overhead Expense Benefits?

In general, business owners would qualify for BOE benefits if they are unable to perform the necessary responsibilities of their job due to a disability or sickness resulting in the need for overhead expense support. However, there are other factors that contribute to eligibility based on a person’s age and company requirements. While some insurers have different requirements for eligibility, here are some of the most common requirements:

  • The business owner is under the age of 70
  • The business has been operating for a minimum amount of years
  • The business brings in a minimum amount of revenue
  • The business owner is responsible for a minimum amount of business expenses
  • The business owner works a minimum amount of hours per workweek

How Long Can You Benefit From BOE Insurance?

Business overhead expense insurance policies typically have a benefit period of 12, 18 or 24 months. A business owner who is benefiting from their BOE insurance policy is eligible to receive benefits until they recover enough to return to work within their benefit period.

How Unity Insurance Can Help Protect Your Business

Understanding the intricacies and limits of insurance policies can be overwhelming for many people, but taking the time to properly select insurance is vital. At Unity Insurance, our top priority is working with our clients to develop a policy that best suits their needs. Learn more about how the qualified insurance professionals at Unity Insurance can help you by calling 410-539-6642 today.