Businesses of all sizes face risks and uncertainties, and some worry about managing their overhead expenses when disaster strikes. Business owners often use insurance policies to protect against risks that could significantly damage their finances, operations, or reputation. One type of insurance you should consider is BOE (Business Overhead Expense) Insurance.

BOE insurance helps cover your business’s ongoing expenses when you or your star employees suffer illness or disability until it’s possible to resume operations. It provides financial support to keep the business running, even covering essential expenses like rent, utilities, payroll, and taxes while you cannot work.



Let’s start from the known to the unknown. This post explains why every business owner should consider BOE insurance and what it covers. Hopefully, it will inform and empower you to make the right decision for your business.

What Is Business Overhead Insurance

BOE insurance is a type of disability coverage that helps business owners keep their businesses running if they suffer an illness or injury. It’s like a safety net that provides funds to cover essential expenses when you can’t work. 

Business overhead expense insurance typically pays for operating costs such as rent, utilities, insurance premiums, payroll, and taxes. Without such a policy, a business could go bankrupt in a few months if the owner were to fall ill.

If your business depends on a star employee and would grind to a halt without them, you can include their BOE coverage in your plan. Please note: BOE insurance doesn’t cover personal expenses like mortgage payments or groceries. It’s intended to keep your business afloat, not sustain your lifestyle. 

The Importance of Business Overhead Expenses Insurance

This type of coverage is especially crucial for small businesses with limited resources. Such businesses largely depend on their founders or a star employee to keep things running smoothly. Without these key individuals, a business may struggle to stay afloat and could even face closure. 

Business overhead expenses insurance can provide financial stability and security for your company in an unforeseen circumstance. It helps cover essential expenses that keep your business running, so you don’t have to dip into savings or debt to keep your doors open. 

How BOE Insurance Works

If you can’t work due to an illness or injury, BOE insurance kicks in and pays a certain amount of your covered business expenses. The coverage amounts are typically limited to a specific monthly benefit period, usually between 12-24 months. 

The policy will also have an elimination period, which is the waiting time before benefits start being paid out. This period can range from 30-90 days and is meant to ensure you only use the policy for longer-term business disruptions.

What Are the Different Types of BOE Insurance?

There are two main types of BOE insurance: individual and group. 

Individual BOE Insurance

The business owner or self-employed individual purchases this type of coverage to protect their personal investment in the company. If they cannot work, this policy will provide a monthly benefit to cover overhead expenses until they can return to work. 

Group BOE Insurance

An employer typically provides group BOE insurance as a benefit for their employees. In this case, the policy covers the business’s overhead expenses if a key employee or group of employees cannot work due to illness or injury. 

Group BOE insurance policies favor the employer and the employees as it ensures the business can continue to operate and employees are paid during their recovery. 

What Expenses Does BOE Insurance Cover?

BOE insurance typically covers essential expenses necessary to keep your business running, such as rent or mortgage payments, utilities, payroll, taxes, and other operating costs. It’s important to review your policy carefully to understand what specific expenses are covered and whether there are any limitations or exclusions. 

How Much BOE Insurance Do You Need?

The amount of BOE insurance you need depends on your business’s size, expenses, and risk factors. A general rule of thumb is to have enough coverage to cover at least six months of overhead expenses. Consult with an insurance professional, though, because your business might need more than one year of overhead expenses. 

How Much Does BOE Insurance Cost?

BOE insurance costs vary depending on factors such as age, health, occupation, and the type of policy you choose. Generally, individual policies are more expensive than group policies because they cover a single person rather than a group. 

Additionally, premiums may be higher for high-risk occupations, such as construction workers or firefighters. Moreover, different insurance companies offer different prices and benefits, so you should do some research. 

Tax Implications of BOE Insurance

Generally, premiums paid for group BOE insurance are tax-deductible for employers, while employee benefits are typically considered taxable income. 

On the other hand, premiums paid for individual BOE insurance may not be tax-deductible, but any benefits received would be tax-free.

It’s important to consult qualified accountants on anything to do with taxes. 

Final Thoughts on Business Overhead Expense Insurance

In conclusion, investing in BOE insurance is a wise decision for small business owners to ensure their company’s continued operations and financial stability. Remember, premiums may vary depending on age, health, occupation, and type of policy. Coupling business overhead expense insurance with business owners’ package insurance (BOP) can offer comprehensive protection for your business. Research thoroughly and consult with insurance professionals to determine the best coverage for your business needs.