Business Overhead Expense
Business overhead expense (BOE) is a form of disability insurance specially suited to the business owner.
BOE policies are designed to reimburse certain business expenses of the owner while he or she is totally or partially disabled. The funds provided by the BOE policy help the business survive during the period of the owner’s disability. Often, the BOE is the policy that allows the owner to return to the business after the disability. If the disability appears to be permanent then the owner usually has the additional time to make decisions regarding the future of the business (usually 12-18 months).
Generally, there are only certain types of business owners who qualify for BOE coverage. These include owners of closely held businesses, owners of small businesses, and professionals with their own practices. Some of the expenses typically covered by a BOE policy are: legal and accounting fees, rent, utilities, principal payments on debt, leased equipment, business insurance premiums, office supplies, salaries of non-owner, non-family employees, professional dues, business taxes, and workers compensation.
In no instance is there any payment from the BOE policy to the business owner. Instead, these funds must come from the individual’s disability plan.
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