Business Overhead Expense Insurance

What Does Business Overhead Expense Insurance Mean?

Business overhead expense insurance is a type of commercial insurance that provides financial support to cover a business’s operating expenses if the owner becomes disabled.

Insuranceopedia Explains Business Overhead Expense Insurance

Business overhead expense insurance is specifically designed to cover the business’s operating costs, not the personal expenses of the owner who becomes disabled. Most policies cover various business expenses, such as employee salaries, rent, and taxes. This type of insurance is particularly beneficial for small businesses, as it helps maintain operations while the owner is unable to work. For owners wondering what other policies they may need, our breakdown of how much small business insurance costs covers several common types and their average premiums. However, coverage is typically limited in duration, usually lasting only one to two years from the time the insurance is activated. Additionally, most policies apply whether the owner’s disability is partial or total. It is worth noting that business overhead expense insurance is separate from personal disability insurance, which replaces a portion of the individual’s income rather than paying business bills.