Tuesday, December 22, 2009

Look, Overhead!

If you own a small business, you've probably purchased coverage for your office equipment, maybe a truck or three, and of course your business liability insurance. But have you considered what would happen if you were to become disabled for any length of time? Hopefully, you've already purchased disability income insurance on yourself (and, perhaps, some key people), which will help keep food on your family's dinner table.

But what about keeping your company's doors open?

One of the most often overlooked types of coverage is Business Overhead insurance (BOi). This valuable coverage can help pay for everyday, on-going expenses like the phone and electric, rent, even some salaries. Unlike "regular" disability insurance, these plans are written for a short time horizon; they typically pay out for only one or two years. That's because they're designed to help keep the business afloat if one recovers quickly, or to buy one time to sell the business if not.

Also unlike personal disability policies, the premiums for these plans are generally tax deductible business expenses, which helps lower their net cost. And since they're written with relatively short benefit periods, the gross premiums aren't too hateful, either.

That's very interesting and helpful, Henry, but where do I go to buy BOi?

As with any type of disability (or life, or health) plan, your best bet is your local professional, independent agent. He (or she) will know which carriers have the right plan (or plans) for your type of business model, and can help coordinate your various other coverages with it.
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