Running a business involves more than just selling products or services. There are ongoing costs, essential for day-to-day operations, that are known as overhead expenses. These expenses keep the business running smoothly, even when there’s no incoming revenue.
A business overhead expense (BOE) policy is a type of insurance designed to help cover these costs if a key person in the business, like the owner or a critical employee, becomes disabled due to illness or injury.
Here are some key points about BOE policies:
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What it covers: BOE policies typically cover a defined list of fixed expenses, such as:
- Rent or mortgage payments
- Utilities
- Salaries and benefits for essential employees
- Loan payments
- Insurance premiums
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What it doesn’t cover: BOE policies generally do not cover variable expenses, such as inventory or marketing costs, or the owner’s personal income softballwebsites.com/.
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Benefits: BOE coverage can provide valuable financial protection for a business in the event of a key person’s disability. It can help:
- Maintain essential operations
- Meet financial obligations
- Avoid laying off employees
- Provide time to find a replacement for the disabled person
Considering BOE coverage?
If you own a business, especially one that relies heavily on the work of a few key individuals, BOE coverage can be a valuable tool in your risk management strategy. It’s important to consult with a qualified insurance professional to determine if BOE coverage is right for your business and to understand the specific terms and conditions of any policy you are considering.