Business Overhead Disability Insurance—often called Business Overhead Expense (BOE) insurance—exists for one reason: if you can’t work because of an illness or injury, your business expenses don’t stop. Rent still comes due. Payroll still hits. Utilities, software subscriptions, equipment leases, insurance premiums, and loan interest keep showing up on schedule. A BOE policy is designed to keep those essential business bills paid so your operation can stay intact long enough for you to recover, return, or make a thoughtful transition plan.

At Diversified Insurance Brokers, we help business owners and professional practices structure disability coverage in a way that protects both sides of the equation: your household income and the business infrastructure that produces it. Most owners already understand the value of personal disability coverage, but many are surprised to learn how quickly a disability can threaten the business itself—especially if the owner is the primary producer, manager, or rainmaker. BOE coverage is the part of the disability plan that keeps the lights on and the staff paid while you’re dealing with the health event.

What Is Business Overhead Disability Insurance?

Business Overhead Disability Insurance reimburses a business for covered operating expenses when the insured owner becomes disabled and can’t perform their work duties. It is generally designed for small businesses and professional practices where the owner’s absence can create immediate revenue disruption, but the expenses remain fixed. Think of it as “time-buying coverage.” It buys the business time—time for recovery, time to reduce expenses intelligently, time to train a replacement, or time to plan a sale or transition instead of being forced into a decision under pressure.

Unlike personal disability insurance, which sends benefit payments to you to help replace your income, BOE coverage is aimed at the business’s operating costs. That distinction matters because owners often discover that even if their household is covered, the business can still collapse if overhead continues without revenue. BOE is specifically built to prevent a disability from turning into a business failure.

Who BOE Coverage Is Designed For

BOE policies are most common among owners whose absence would materially affect revenue or operations and who carry meaningful fixed expenses month after month. In practice, that includes many professional practices and service-based businesses where the owner’s work is a major driver of income. If you have a lease, equipment payments, a staff payroll, and ongoing business obligations, BOE coverage can be one of the most practical disability solutions you can put in place.

This type of coverage is often a strong fit for:

• Practice owners (medical, dental, chiropractic, therapy, and similar healthcare services)

• Professional service owners (attorneys, accountants, architects, consultants)

• Small business owners with staff and ongoing fixed expenses

• Partners in a firm where one partner’s disability would strain overhead allocation

• Owners who already have personal disability insurance and want to protect the business separately

If you’re a practice owner, BOE coverage is often considered alongside occupation-specific personal disability plans like disability insurance for dentists, because the planning challenge isn’t just replacing personal income—it’s keeping the practice operational long enough to maintain goodwill, retain staff, and avoid an emergency shutdown.

What Expenses Are Covered?

A BOE policy is built to reimburse common operating expenses that are necessary for day-to-day business operations. Coverage details vary by carrier and policy language, but the intent is consistent: cover the overhead you would normally pay whether you’re working or not. This is what keeps the business stable while revenue is impacted.

BOE policies commonly reimburse expenses such as rent or mortgage on office space, employee salaries and payroll taxes (often excluding the owner’s personal salary), utilities, phone and internet service, professional dues and licenses, accounting and billing support, business insurance premiums, interest on business loans, office supplies, and equipment leases. Some policies can include additional categories that are important in a professional practice environment, where leased equipment and staff costs represent a large portion of the monthly overhead.

While your original draft lists these items as bullet points, BOE coverage is easier to understand when you imagine a normal month of business operations and ask one question: “If I couldn’t show up for the next 3–6 months, which bills would still hit my account?” Those are the bills BOE coverage is designed to address.

How Business Overhead Disability Works in Real Life

BOE policies typically have an elimination period (waiting period) followed by a benefit period. The elimination period is usually shorter than personal disability insurance because overhead bills don’t wait. Common elimination periods include 30, 60, or 90 days. After the elimination period is satisfied, the policy reimburses covered monthly overhead expenses, usually up to a selected monthly maximum benefit amount.

The benefit period is commonly 12, 18, or 24 months. This duration is intentional. BOE coverage is not designed to pay overhead forever; it is designed to give the business enough runway to recover, stabilize, restructure, or transition. If your disability becomes extended or permanent, that runway can become the difference between selling the business thoughtfully versus shutting it down under stress.

BOE coverage also tends to feel different in the claims experience because the reimbursement is tied to actual expenses. In other words, you are not simply receiving a flat monthly check like personal DI. You are typically submitting proof of eligible overhead expenses and receiving reimbursement up to the policy’s monthly benefit maximum. That structure is what keeps the coverage aligned with the business’s real financial needs.

How to Choose the Right Monthly Benefit Amount

The most important number in BOE planning is your monthly overhead. Not your gross revenue. Not your profit. Your overhead. That includes the expenses you must pay to keep operating: lease payments, staff compensation, utilities, insurance, recurring subscriptions, equipment, and basic administration. When we help clients structure BOE coverage, we typically start by reviewing a simple monthly overhead summary. The goal is to choose a monthly benefit amount that realistically matches the actual overhead burden.

Some owners are tempted to “round up” or to insure revenue, but BOE coverage is typically designed for expenses, not for profit. That’s why coordinating BOE with personal disability insurance matters. Personal DI protects household income and lifestyle. BOE protects the business’s ability to keep operating. Together, they create a more complete disability plan—especially for owners whose income depends on preserving business continuity.

Key Policy Features That Affect BOE Value

Two BOE policies can look similar on the surface but feel very different if a claim occurs. The best BOE policies aren’t just about the premium. They’re about how quickly benefits begin, how expenses are defined, and whether the policy includes practical options that reflect real business operations.

Elimination period and benefit duration. A 30-day elimination period generally costs more than a 90-day elimination period, but it can matter if overhead is heavy and cash reserves are thin. The benefit duration should match how long you realistically need the business to be supported while you recover or transition. In many professional practices, 12–24 months is the “runway” window that makes the most planning sense.

Residual or partial disability benefits. Not all disabilities are total. Sometimes an owner can return to work part-time or in a limited capacity, but revenue still drops materially. Policies that recognize partial disability or reduced capacity scenarios can be more practical because the business may still need overhead support even if some work continues.

Replacement expense features. Some BOE policies allow for reimbursement of replacement labor costs. That can be a major value point if the business can remain profitable by paying a substitute or locum to maintain revenue while you’re out. The right structure here can be the difference between “keeping the doors open” and “keeping the business healthy.”

Expense definitions and documentation. The more clearly the policy defines eligible expenses, the easier the claims process tends to be. In BOE coverage, clarity matters because reimbursement is tied to proof of expense.

How BOE Differs From Personal Disability Insurance

It’s easy to confuse BOE with personal disability insurance, but they solve different problems. Personal disability insurance is meant to replace your income. It pays you, and you use that money to cover household bills and lifestyle needs. Business Overhead Disability Insurance is meant to reimburse business operating expenses. It pays the business (or reimburses the business for documented expenses) so that the business can continue operating while you recover.

Many owners carry both. Personal DI protects the household. BOE protects the business infrastructure. If you only have personal DI, you might be stable personally while your business collapses. If you only have BOE, your business might stay open while your household income suffers. A coordinated plan addresses both.

How BOE Fits With Other Disability Options

BOE coverage is often layered with other disability insurance designs depending on the business structure and the owner’s goals. Some owners want simplified underwriting paths and explore options like no-exam disability insurance when speed matters. Others are part of an executive group and consider guaranteed issue disability insurance where group participation can unlock coverage without extensive medical underwriting. The goal is not to force every owner into the same structure. The goal is to build a disability plan that reflects the reality of how the business earns money and pays expenses.

For owners in niche industries or high-profile roles where income can be volatile, planning may also include specialized disability structures like disability insurance for the entertainment industry. In those cases, the BOE conversation often focuses on whether there’s meaningful fixed overhead that must be protected or whether the bigger risk is personal income interruption.

Tax Treatment: Deductibility and How Benefits Are Treated

BOE coverage is commonly structured so that premiums are paid by the business and may be deductible as a business expense, while benefits received are generally considered taxable income to the business. That sounds like a negative until you remember what the benefits are used for: paying deductible business expenses. In many cases, that creates a fairly neutral result because the taxable benefit income is offset by deductible expenses paid with those benefits.

That said, business tax situations vary widely by entity type and accounting approach. The practical guidance is to treat BOE tax handling as an “implementation step,” not as a reason to avoid the coverage. You coordinate the details with your tax professional based on how your business is structured.

Example Scenario: Why BOE Coverage Matters

Imagine a practice owner with meaningful monthly overhead: a lease, staff payroll, utilities, insurance premiums, equipment leases, and recurring software subscriptions. If a health event keeps that owner out of the office for months, revenue can drop quickly. But overhead doesn’t. Without BOE coverage, the owner often faces one of two bad options: drain personal savings to keep the practice alive, or reduce staff and operations so aggressively that the practice loses momentum and long-term value.

A BOE policy changes the outcome by providing reimbursement for eligible overhead expenses after the waiting period. That doesn’t just “pay bills.” It protects business continuity, preserves staff stability, and helps maintain goodwill with patients or clients. It also gives the owner time to make strategic decisions—whether that means returning to work, bringing in a temporary replacement, or transitioning ownership—without the business collapsing during the disability window.

How to Structure BOE Coverage for a Medical or Dental Practice

Practice owners often have a higher-than-average overhead burden because staff costs and equipment expenses are substantial. That makes BOE coverage especially relevant. The coverage goal is usually not to replace profit—it’s to keep the operational engine running long enough for the practice to preserve its value. That’s why BOE is frequently discussed alongside occupation-specific disability strategies like disability insurance for dentists, because the owner’s disability risk can be both personal and operational at the same time.

In many practice scenarios, a BOE plan that includes replacement expense language can be especially valuable. If a substitute provider can keep production going, the practice may stay financially stable, which reduces long-term damage and helps retain staff. Even when a substitute isn’t feasible, the BOE runway can preserve the practice’s ability to recover and remain saleable if the disability lasts longer than expected.

Common BOE Planning Mistakes to Avoid

Insuring too little overhead. Owners sometimes underestimate monthly overhead because they focus on annual numbers or because certain expenses feel “small” individually. BOE coverage works best when it matches real monthly obligations.

Assuming personal DI solves the business problem. Personal DI is critical, but it’s not designed to cover business rent, payroll, or equipment leases. If you rely on personal DI to keep the business afloat, you may sacrifice household stability or drain savings to do it.

Choosing a waiting period that doesn’t match reality. A long waiting period can reduce premium, but if your business can’t absorb three months of overhead without stress, the “cheaper” design may not be the best design. The right waiting period is the one you can realistically bridge with cash reserves.

Not coordinating with other coverage. BOE coverage should fit inside the broader disability strategy. That includes any group disability, executive disability, or simplified underwriting approaches you may be considering.

Why Work With Diversified Insurance Brokers

Diversified Insurance Brokers is a fiduciary, family-owned agency licensed in all 50 states. We help business owners compare disability options with a focus on practical outcomes: what gets reimbursed, how long the runway lasts, how the waiting period affects the real-world plan, and how BOE fits with personal disability coverage. Our role is to design coverage that reflects how your business actually operates, not a generic template that ignores the reality of overhead expenses and revenue dependence.