If you were to become temporarily disabled, how long could you continue to pay your company’s bills? For many business owners, the answer is “not long.” That’s why there’s business overhead insurance.
This type of coverage, also called office overhead insurance, covers the routine expenses that your business must pay each month while you can’t work. Sounds a lot like disability insurance? It is, in a way. But disability insurance is designed to pay benefits to you in the event of a disability. Business overhead insurance pays benefits to your company.
The coverage is designed to provide a way to cover the fixed expenses that keep on coming whether or not you’re able to work. For example, an orthodontist who is temporarily disabled may not be able to see any of his patients for several weeks. But he’s still on the hook for his lease payment, utility bills and employees’ salaries during that time period. With this type of insurance, typically your salary isn’t covered, but your employees’ salaries are.
Policies vary based on when the coverage kicks in – typically 30 to 90 days – and how long benefits are paid. It’s important to keep in mind that these aren’t long-term policies. If a business owner is permanently disabled, it provides some breathing room to sort out their finances, find someone else to run the business or decide to sell the business. That’s a lot better than having to arrange a fire sale or abruptly close your doors.
Overhead insurance is one of several types of coverages your business may want to consider. Give us a call to make sure you know all your options.