Business Overhead Expense

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Agent Files
BOE - How it Works.pdf
Client Files
BOE - How it Works.pdf
BOE Worksheet.pdf

What is Business Overhead Expense Insurance?

Business Overhead Expense is an insurance policy that reimburses a small business owner for certain business expenses if they become sick or hurt and unable to work. The monthly benefit amount is based on qualified business expenses at the time the policy is purchases. A typical policy can reimburse up to $50,000 of monthly expenses.

Target Markets

• Small- to medium-size businesses with up to eight owners
• Occupation classes that are white and grey collar
• Owners whose personal service is key to the continued earning of business income
• Companies with less than 20 employees
• Law firms, physicians, dentists

What is an elimination period?

The elimination period is the period that must pass before benefits are payable. Typical elimination periods include 30, 60, 90 days. The shorter the elimination period, the more costly the plan.

What is a benefit period?

The benefit period is how long benefits are payable while you are on claim. Typical benefit periods are 12, 15, 18, or 24 months. The longer the benefit period, the more costly the plan.

What is the definition of total disability?

Most policies will consider you to be disabled if you cannot perform the substantial and material duties of your occupation, and you are not working.

What is a residual disability?

Residual disability provides a benefit if you are not totally disabled, but you can work on a part-time basis and continue to have a loss of earnings. Benefits are payable only if gross revenue is less than actual overhead expenses.

What are some examples of covered expenses?

Building expenses

• Rent or mortgage (interest and principal)
• Property tax
• Equipment leasing costs
• Security and maintenance

Utilities

• Electricity
• Telephone

Other

• Business-related loans
• Insurance premiums (property, malpractice, fire, etc.)
• Accounting, billing and collection fees
• Subscriptions and membership dues
• Salary for your replacement
• Employee salaries
• Other expenses