How long could your business survive without you?
• What would happen to your business?
• Your employees?
• Your customers?
Business overhead insurance is usually one of the most important types of coverage for small business owners or those with their own practice such as physicians, attorneys, accountants, etc.
In the event that you are disabled, business overhead expense insurance will provide funds that can be used to recover certain operational expenses of the company. The income provided by your business overhead policy will help the company to continue operations during the business owner’s disability. Business overhead insurance policies are usually purchased for short term periods ranging from 12-24 months depending on the needs of the particular business. They are designed to “buy time” while the business owner recovers from a disability. If the disability is expected to be long term or permanent, the company can be sold at fair market value or dissolved.
In the event a business owner or principal becomes disabled there is a short “waiting period” before benefits become payable. This short period, called the elimination period is usually 30-60 days and is selected by the insured at the time the application is underwritten. Once the elimination period has been met, benefits begin to be paid based on the policy limits as well as the amount of covered expenses incurred the previous month.
There are several methods companies use to pay benefits during periods of fluctuating monthly expenses as well as additional policy options. A careful review of the actual policy language with respect to how benefits are paid is essential to assure the correct policy is selected.
Premium payments for business overhead expense insurance are considered by the IRS to be a tax deductible business expense. When benefits are received, they are considered income. Of course, as soon as ordinary business expenses are paid they become deductible as well.
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How about your business expenses – including you and your employees’ salaries – could go unpaid. How long could your business last without you and one of you key personel?
How do you plan to prepare for the unexpected? Our agents can help you prepare with Business Overhead Expense (BOE) Insurance. Most BOE policies are designed to help cover your overhead while you’re disabled. So your business can stay healthy – even when you’re not.
You can choose to receive benefits for 12 or 24 months. However, as long as you remain eligible for benefits, your policy permits payments to continue beyond this 12- or 24-month period until the Maximum Aggregate Benefit of your policy has been paid.