Business Overhead Disability Insurance—also called Business Overhead Expense (BOE) insurance—protects business owners by covering essential operating expenses if the owner becomes disabled. While personal disability insurance replaces your income, this policy keeps your business doors open and bills paid until you recover or transition ownership.

At Diversified Insurance Brokers, we specialize in helping small-business owners, medical professionals, and entrepreneurs protect both their livelihood and their business operations with tailored disability coverage that fits their needs.

What Is Business Overhead Disability Insurance?

Business Overhead Expense Disability Insurance reimburses monthly business expenses when you cannot work due to injury or illness. It’s designed for self-employed professionals and small-business owners whose absence would immediately impact revenue. The policy pays overhead costs to ensure your company continues operating while you recover or determine next steps.

What Expenses Are Covered?

BOE policies typically cover:

• Rent or mortgage on office space
• Employee salaries and payroll taxes
• Utilities and phone/internet services
• Professional dues, subscriptions, and licenses
• Business insurance premiums
• Interest on business loans
• Accounting, billing, and administrative support
• Office supplies and equipment leases

In short, if the expense is necessary for day-to-day business operations, it can likely be covered under your policy.

Who Needs Business Overhead Expense Coverage?

This type of insurance is ideal for:

• Self-employed professionals (physicians, dentists, attorneys, accountants)
• Small-business owners responsible for fixed overhead
• Medical or dental practice owners
• Partners in professional service firms
• Business owners with personal disability income coverage who want to protect their company as well

For example, a dentist unable to work due to an injury may have personal disability insurance to replace income—but the dental office still needs to cover rent, staff payroll, and equipment leases. A BOE policy fills that gap.

How Business Overhead Disability Works

After a waiting period—typically 30, 60, or 90 days—the policy reimburses your business for eligible expenses for up to 12, 18, or 24 months. During that time, your office, clinic, or practice remains operational. If your disability becomes permanent, the policy provides valuable time to sell, transfer, or restructure your business.

Tax Benefits and Deductibility

Premiums paid for Business Overhead Expense insurance are usually tax-deductible as a business expense, while the benefits received are considered taxable income to the business. However, since those proceeds are used to pay deductible business costs, the net effect is typically tax-neutral. Our advisors can help coordinate with your tax professional to ensure proper treatment.

Key Policy Features

• Monthly benefit amounts from $1,000 to $50,000 or more
• Elimination periods as short as 30 days
• Benefit durations of 12 to 24 months
• Optional residual benefit for partial disabilities
• Coverage for replacement labor costs
• Tax-deductible premiums for most businesses
• Nationwide coverage through A-rated carriers

How It Differs from Personal Disability Insurance

Personal Disability Insurance replaces your personal income if you cannot work. Business Overhead Disability Insurance covers your company’s fixed operating expenses. Many business owners carry both to protect their household finances and their business simultaneously.

Integration with Other Coverage

BOE policies can be combined with other coverage types, including:

• No-Exam Disability Insurance for simplified qualification
• Guaranteed Issue Disability Insurance for executive groups
• Disability Insurance for Dentists to protect practice owners
• Disability Insurance for the Entertainment Industry for high-profile professionals

Example Scenario

Imagine a small business owner earning $200,000 per year who oversees five employees. If an illness prevents them from working, expenses like rent, payroll, and utilities continue regardless of income. A Business Overhead Expense policy ensures those obligations are met, protecting both the company and its employees until recovery or transition.

Why Work with Diversified Insurance Brokers

Diversified Insurance Brokers is a fiduciary, family-owned agency licensed in all 50 states. We represent more than 75 top-rated disability carriers and specialize in designing custom coverage for professionals, medical practices, and small businesses. Whether you need a stand-alone BOE plan or a coordinated disability strategy, our advisors will compare options to find the best value for your situation.

Related Topics to Explore

• No Exam Disability Insurance
• Guaranteed Issue Disability Insurance
• Disability Insurance for Dentists
• Disability Insurance for the Entertainment Industry