Expense Insurance, commonly called Business Overhead Insurance protects Colorado business owners by covering operating expenses while the owner is out of work because of a disability. Business overhead expenses (BOE) reimburse the insured for expenses that are vital to keep the business operating. Without an insurance policy like this, a business owner may not have financial support to keep the doors open. How long can a business survive if the owner is temporarily disabled and unable to work? A BOE acts to financially support a business during the rough period of an owners disability.
Business Overhead Expense InsuranceBusiness overhead expense (BOE) insurance is arranged to compensate a Colorado business for overhead expenses if a business owner becomes disabled. This is different from a personal disability policy because that type of insurance pays benefits to age 65. A BOE insurance policy pays a shorter benefit of 1 to 2 years after a period of waiting time of usually 30 - 60 days. This waiting time is called the elimination period. Common conjecture says that most Colorado businesses cannot stay open more than 2 years after the owner becomes disabled and the business will either be liquidated, sold, or shuttered. BOE policies also work with multiple owners. Each owner can take out a policy to oblige their own share of the expenses.
Industry standards state that there are 2 conditions which must happen to initiate the policy to pay out proceeds.
- The owner is completely disabled from sickness or injuries.
- All of the expenses that need to be covered by the insurance policy need to be incurred while the owner is disabled.
What Expenses are Covered with Business Overhead Insurance?
The salaries of employees Taxes related to employment Benefit costs of employees Accounting fees and legal fees Rent for property and leased equipment
Loans on mortgages owned by the business Business debt interest payments Business utility payments Business insurance payments Taxes on property owned by the business