If you are running your own company, more likely the “wellbeing” of your business greatly depends on you. In case of your long- or short-term disability, Business Overhead Insurance pays your regular monthly expenses. It is designed for self-employed business owners who are involved in the day-to-day operations and who generate all their company sales and revenues. With a business overhead insurance policy, the only worry you may have is to get better because your absence will not affect your business.
With Business Overhead Insurance you can be there even if you are actually not
Understanding Business Overhead Insurance
Business overhead expense insurance may be purchased between $500 and $6,000 of monthly coverage. The main features are:
- Available for people ages 18 – 60
- Benefits can be paid over a period of time of up to 24 months
- Waiting period could be as few as 15 days of disability
- It is also possible to increase your coverage at a later date
In the event of your illness or injury, benefits would be payable starting on the 16st day of an illness or injury and can continue for up to 24 months.
The business overhead insurance plans do not pay out a flat rate for eligable expenses as the costs can fluctuate month to month. Instead policies are paid out monthly up to the policy’s monthly coverage limit.
Benefits of Business Overhead Expense Insurance
Business overhead expense insurance benefits can be used on eligible business expenses such as:
- Mortgage or rent
- Property taxes
- Association fees
- Utilities
- Phones
- Internet
- Licenses
- Equipment costs
- Corporate car leases
- Professional services (e.g., bookkeeping)
- Salaries for personnel who do not generate revenue and whose duties are vital for business operations
The other benefits of business overhead expense insurance are:
- Premiums for business overhead insurance policies are tax deductible and can be written off as a business expense (however any benefit payments are considered taxable income).
- There are various options available
- Return to work assistance may be provided to support your transition back to work, If appropriate
What business overhead insurance does not cover
The business overhead insurance policies do not cover:
- the salaries of business owners
- employees brought in to replace the disabled insured
- family members
- partners
- other employees that do the same work (for example, dentists in a dental clinic cannot have their salaries paid for if another dentist becomes disabled).
If the disability is scheduled to last longer, the only other options may be to sell or let the business dissolve.
Hope for the best but be prepared for the worst
Business overhead expense benefits can let you recover, worry-free, while your business continues to run as smoothly as possible. This plan doesn’t just protect your business; it gives you peace of mind. Without a business overhead insurance policy, disabled business owners may not have any other option to save their company.
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