Disability Business Overhead Expense Insurance (BOE)

Disability Business Overhead Expense (BOE) Insurance is a type of insurance policy designed to help business owners cover their overhead expenses in the event that they become disabled and unable to work. This type of insurance policy is intended to provide financial protection for the business, allowing it to continue operating while the owner is unable to work.

Here are some key features of a Disability Business Overhead Expense Insurance policy:

• Coverage for overhead expenses: BOE insurance is designed to cover specific business expenses such as rent or mortgage payments, utilities, taxes, insurance premiums, employee salaries and benefits, and other necessary expenses that are required to keep the business running.

• Short-term benefits: BOE insurance is typically designed to provide benefits for a relatively short period of time, such as six months to two years.

• Waiting period: There is typically a waiting period before benefits kick in, typically 30, 60, or 90 days after the disability occurs.

• Premiums: BOE insurance premiums are tax-deductible for the business, and the benefits received are also generally considered to be tax-free.

• Coverage limits: The coverage limit for BOE insurance is typically based on the business's overhead expenses, and the amount of coverage needed will vary based on the size and type of business.

• Elimination periods: BOE insurance policies often include an elimination period, which is a set amount of time that must pass before benefits are paid out. This period can range from 30 to 90 days.

• Renewability: BOE insurance policies are often renewable, which means the policy can be extended beyond the initial coverage period.

Example: John owns a small business that requires a lot of overhead expenses to keep it running smoothly. He decides to purchase a BOE insurance policy to protect his business in case he becomes disabled and is unable to work. The policy has a waiting period of 60 days and provides coverage for up to one year. After 60 days of being unable to work, John begins receiving monthly benefits to cover his business expenses until he is able to return to work.