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Overhead Expense Insurance is designed to pay the expenses of operating your business during a short-term disability. Unlike disability insurance, overhead expense insurance pays your business expenses whereas disability insurance replaces your earnings.

What would happen to your business if a sudden disability left you unable to run it? If you answer, "I am my company's biggest asset, and without me it fails," here's some bad news and some good news.

Business owners buy life insurance to protect their families and their business partners from loss in the event of death.  But they don't often consider the even greater possibility that they will become disabled because of sickness or injury.  They should cover both contingencies as a matter of course, just like they buy fire and theft insurance to cover their business.

Unlike disability insurance, overhead expense insurance pays the expenses of running your business during a short-term disability.  If a business owner is disabled for longer than two or three years most businesses would close or be sold.

The monthly benefit is determined by your overhead.  Overhead includes, but is not limited to, rent, salaries other than your own, telephone, supplies, equipment, utilities, magazine subscriptions, dues, insurance, accounting and attorney fees, - anything required to keep your business open.  Most policies pay a benefit only if you are totally disabled.  However, there are a few companies that pay benefits when the insured is partially disabled.

Benefits begin after a waiting/elimination period of 30, 60, 90, 180, 365 or 720 days.  Most policies begin after a 90 day waiting period depending upon the needs of a client.

Benefits are paid for as long as 720 days depending upon the company selected.  Most clients want their benefits to be paid for at least one year.  A policy that pays benefits for two years is more expensive than a policy that pays benefits for one year.

Riders can be added to your policy.  For example, you can add a rider that allows you to increase your monthly benefit when your overhead increases.  The addition of a future insurance option is a sought-after rider.

Business overhead expense insurance, like fire and theft insurance, is a cost of doing business.  Without this type of coverage, a business owner would not be able to operate his or her business for very long before having to shut down.  Drawing on personal disability insurance does not make sense for two reasons: first, your standard of living would be reduced by the monies diverted to running your business and second, overhead expense premiums are deductible.

To check insurance company ratings, click Moody , Standard and Poors or A.M. Best.

If you would like to discuss overhead expense insurance for your business, call our toll-free number (800) 501-8078 and ask to speak to one of our insurance professionals or return the overhead expense quotation that we have included or  E-Mail us at

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Last modified: June 13, 2012