Importance of Business Overhead Expense Insurance

By Inga Zayjens // No Comments » // business overhead, business overhead expense, expense, insurance, overhead expense

Do you run a small business that requires the help of few employees? Then you should have BOE insurance or business overhead expense plan. This type of policy will cover the ongoing operating expenses of your practice should a worker becomes disabled. Below is a list of probable expenses that BOE insurance covers:

* Rent or Mortgage Payments
* Employee Salaries and Benefits
* Utility Bills
* Property Taxes
* Accounting Fees, Legal Fees, and Professional Dues
* Malpractice and Other Business Insurance Premiums
* Maintenance and Janitorial Services
* Depreciation
* Interest on Business Debts
* Office Supplies
* Other Fixed Expenses that are Ordinary, Necessary, and Tax Deductible

Some policies might even cover the salary of a temporary employee hired to do the tasls of the disabled. Now if you think that this policy is just like personal disability insurance, read the key factors below and you’ll learn about its differences.

Benefit Periods – Generally, BOE insurance policies have short benefit periods that do not exceed two years. That is because unlike personal disability insurance, BOE insurance is not protecting your ability to generate income but rather allows you to keep your practice open, or at least pay for its expenses until your employee recover.

Maximum Benefits – Personal disability insurance pays a monthly benefit as defined in the policy. BOE insurance policies on the other hand offer a maximum monthly benefit, but only pay the actual overhead expenses if they are less than the maximum benefit.

Taxation – Provided that premiums for personal disability insurance are paid with after-tax dollars, the benefits are tax free.

After reading the facts provided above, I hope you can now make a decision whether BOE insurance will work for you or should you stick to personal disability insurance.

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