Disability Business Overhead Expense Insurance (often called BOE insurance) is one of the most overlooked tools for protecting a small business. While personal disability coverage replaces your income, BOE coverage reimburses your company for fixed overhead costs like rent, payroll, and utilities if you become disabled and cannot work. Without this protection, even a few months of lost leadership can put an otherwise thriving business at risk of closing its doors.

What Is Business Overhead Expense Insurance?

Business Overhead Expense Insurance is designed to protect the financial foundation of your company when the owner or a key partner is unable to work due to disability. Unlike personal disability insurance, which pays benefits to the insured individual, BOE coverage reimburses the business for its actual fixed operating expenses. This ensures your practice, office, or company continues running smoothly while you recover or determine next steps.

Why Business Owners Need BOE Coverage

Most small and mid-sized businesses operate on tight margins. A sudden disability of the owner can trigger a cascade of financial strain:

• Rent or mortgage payments fall behind
• Employee paychecks are at risk
• Bills, utilities, and vendor contracts pile up
• Clients lose confidence, potentially leaving permanently

BOE insurance solves this problem by providing timely monthly reimbursement for these expenses, typically for 12–24 months. That coverage buys critical time—allowing the business to survive until the owner returns, transitions to new leadership, or winds down in an orderly way.

What Expenses Are Covered?

BOE policies generally reimburse:

• Office rent or mortgage payments
• Utilities such as electricity, gas, phone, and internet
• Salaries, payroll taxes, and benefits for non-owner employees
• Equipment leases and loan payments
• Insurance premiums (business liability, malpractice, property)
• Professional dues, licenses, and fees
• Accounting, legal, and billing services

Importantly, BOE does not cover your own lost salary—that requires personal disability insurance. BOE focuses strictly on keeping the business itself alive.

How Long Do Benefits Last?

Most carriers offer benefit periods of 12, 18, or 24 months. While that may seem short, it is designed to cover the immediate overhead while you recover or implement a long-term plan. In many cases, 12–24 months of protection is more than enough to keep a company from collapsing.

Who Should Consider BOE Insurance?

• Doctors, dentists, and healthcare professionals who own a practice with significant overhead
• Attorneys, accountants, and financial professionals who manage small to mid-sized firms
• Small business owners who are essential to the daily operation of their company
• Partners in a professional practice where shared expenses continue regardless of one partner’s absence

Any owner whose business depends on their presence—and who has significant monthly expenses—should strongly consider BOE coverage.

Tax Treatment

One of the most attractive features of BOE coverage is its tax treatment:

• Premiums are generally tax-deductible as a business expense.
• Benefits received are considered taxable income to the business, but they offset deductible business expenses—often creating a tax-neutral outcome.

BOE Insurance vs. Personal Disability Insurance

It’s common to confuse BOE with personal disability insurance. The difference is straightforward:

• Personal Disability Insurance: Replaces your personal income so you can continue paying household expenses.
• Business Overhead Expense Insurance: Reimburses your business for its operating costs so the company stays afloat.

In many cases, business owners need both types of coverage to be fully protected.

Real-World Example

Consider a small medical practice with $30,000 in monthly overhead. When the physician-owner is sidelined by illness, revenue dries up almost immediately. Without BOE coverage, the practice would struggle to pay staff and cover rent—likely leading to closure within months. With BOE coverage, the insurer reimburses those expenses for up to 24 months, giving the physician time to recover and return to practice without losing staff or patients.

Working With Diversified Insurance Brokers

Since 1980, Diversified Insurance Brokers has specialized in helping professionals and small business owners protect their income and their companies. We represent over 75 carriers, which allows us to compare multiple BOE policies side by side. Our advisors explain options in plain English, help determine appropriate benefit levels, and ensure your coverage integrates with other disability and long-term care planning solutions.