If you get sick or injured resulting in or short or long term disability, how will you keep your business running?
As a business owner, your presence provides vital security to your business. A few months of illness or injury can quickly turn your business or practice upside down. A longer-term disability, on the other hand, can leave you struggling to operate, especially if you have high monthly overhead costs or your business relies on your presence to operate indefinitely. A doctor’s practice, for example, cannot continue to operate without the presence of the doctor, even with nurse practitioners on site.
The COVID-19 pandemic has made many business owners, including medical professionals, evaluate what will happen if they, personally, suffer a disability or illness that prevents them from performing the important duties of their occupation for quite some time. Since COVID-19 can leave people unable to perform the important duties of their occupation for weeks as they battle the illness and wait for the contagious period to end so that they can return to work without endangering customers or patients, it has left many business owners with substantial questions.
How Business Overhead Expense Insurance Can Help
Business overhead expense insurance (BOE) provides a similar protection to what disability insurance provides for you personally. Individual and group disability insurance can provide a regular monthly check that can keep your personal bills paid even when a temporary disability, injury, or illness prevents you from performing the important duties of your occupation. Business overhead expense insurance protects your business. It helps pay those important bills that keep reoccuring that might otherwise go unpaid due to your inability to work.
What Business Overhead Expense Insurance Generally Covers
Business overhead expense insurance does not cover all of the operational expenses associated with your business, but it can help provide a vitally needed cushion that will keep your business or practice operational. Most business overhead expense insurance policies cover:
Employee wages. All the employees who work for you have bills to pay, too. From the receptionist and nurses in a medical practice to construction workers in a construction firm, most employees can not afford to lose their income due to your absence. BOE insurance policies can help cover those expenses and ensure that your employees that were on staff before the disability are covered.
Payroll taxes. As with employee pay, you need to cover payroll taxes whether you come into the office or not. Your BOE insurance policy can provide vital coverage that will prevent you from having to make up those costs or penalties later.
Rent or mortgage payments. You must pay the rent or mortgage on your premises whether you can operate your business or not. BOE insurance can help cover your rent and mortgage, ensuring that you do not lose the property due to temporary disability.
Utility payments. Like the rent or mortgage, utility payments do not disappear due to a temporary disability. BOE insurance can help keep the lights on and ensure that you do not fall behind on utility payments.
Regular operational expenses. To keep your business up and running, you have multiple regular operational expenses. These may include:
- Janitorial services
- Equipment rental
- Licensing fees
- Trade dues
- Water, electric, gas, trash, plant service
What Business Overhead Expense Insurance Will Not Cover
While business overhead expense insurance can provide vital coverage for many things during your disability, some expenses will not fall under those provisions.
- Modifications made to your office or business after your disability. Your BOE insurance will not cover the cost of renovating your office during your disability. Planned renovations can proceed on schedule, assuming that you have already paid for them or have another payment source for those costs, but you cannot use renovations as a BOE-qualifying operational expense during your disability.
- Payment for your income. You will need to carry a separate rider to your BOE to cover your salary if you need to miss work due to disability.
- Payment for the income of a relative or family member. You cannot put a relative or family member on your payroll after your disability and have them receive wage coverage under your BOE insurance. If the relative has worked for you for at least 60 days before your need to claim disability, this provision does not generally apply, and your family member will receive income replacement benefits like the rest of your covered employees.
- Coverage for expenses that get passed on to another source. For example, if customers coming into your practice pay a certain percentage of an overhead monthly expense, such as if they contribute to their health insurance premiums, that expense will not fall under your BOE insurance.
The Questions You Should Ask About Your BOE Policy
Whether you have an existing BOE policy or have chosen to purchase one to combat worry about COVID-19, you should ask several key questions about that insurance policy and what it will cover. Have a skilled business overhead disability insurance lawyer at DarrasLaw provide a free policy review to further your understanding of what it can offer you in the event of a sickness or injury causing disability by COVID-19.
When does coverage begin?
Many policies will not kick in until 30, 60, or 90 days after you sign the contract, this is called the waiting or elimination period. If you choose to pursue business overhead expense insurance to help provide protection if you fall ill due to COVID-19, you may want to select a policy that will kick in faster and help provide protection for your business sooner.
How long does the elimination period last?
Most BOE policies, like individual or group disability insurance policies, will not start providing benefits for your business’s expenses until you have exhausted your waiting period of disability: 30, 60, or 90 days. Closely read your policy or have a seasoned BOE lawyer at DarrasLaw go over your policy to provide you with a better understanding of when your benefits should begin. A long elimination period can decrease the overall expenses associated with your premiums, but it may also mean that it takes longer for you to get the monthly benefits you need if you fall ill or suffer an injury that leads to disability.
How much coverage does the policy offer?
In the midst of the coronavirus pandemic, many business owners have already discovered that their BOE insurance policies provide inadequate dollars or don’t reimburse for someone to replace you in the event of disability. Go over your policy with an experienced business overhead expense insurance attorney at DarrasLaw to make sure you understand exactly how much coverage you have and when the benefits will kick in.
- How long you can claim disability under the terms of your policy? Your policy may limit the length of time you can claim coverage for a single disability. Most policies will provide disability coverage for 12, 18 or 24 months. Make sure you know how long your policy will last so that you can make other overhead arrangements, if needed. If you fall ill from COVID-19, your BOE insurance may last for the duration of your illness. If you suffer a disability for another reason, however, you may need additional insurance coverage. Consult an insurance broker or agent to determine the best type of coverage for your needs, including how long your BOE coverage will run, then have our experienced attorneys review the policy for you.
- How much coverage you can expect? Your policy will limit the amount of coverage you can claim for each month you cannot work due to disability. Your BOE insurance will offer a specific amount of monthly protection based on your pre-disability reoccuring expenses at the time you take on the policy. Some policies allow for rolling benefits. If you do not use all the benefits during each month you may add those unused monthly covered business expenses to the end of the contract until the full total policy benefit is exhausted.
Carefully evaluate all of your business expenses, especially those that rely on you being in the office to help pay them. If your BOE insurance does not provide adequate coverage for those expenses, you may need another revenue stream or source of coverage that will help keep your business operational due to disability.
What riders or additional coverage do you need?
Your BOE insurance can offer incredibly vital protection for your business. You should have the skilled BOE insurance attorneys at DarrasLaw go over your policy to make sure you have all the coverage you need to protect your business.
Medical professionals, for example, may need to hire another doctor to come in and see their patients while they remain on a leave of absence due to disability. Does your policy cover this expense?
Surprisingly, most BOE coverage doesn’t provide payments for a substitute doctor working in your practice—including payment to that doctor comparable to your own income. Without that coverage, however, you may have trouble bringing in another physician to see your patients. Make sure you buy coverage that pays for your replacement.
How does your policy define disability?
Most BOE insurance policies use a fairly standard definition of disability. Consult our award-winning attorneys at DarrasLaw to make sure you understand exactly how your policy defines disability.
Most policies share several key elements.
- You may need to remain under the regular and most appropriate care for your condition to get paid. You may need a doctor—from outside your practice, if you currently practice medicine—to certify your disability and how it prevents you from returning to work. Most insurance companies will require this information to provide benefits when you suffer a disability that prevents you from performing the important duties of your occupation. In the case of COVID-19, that may mean having a positive test or confirmation of the illness from a doctor, not just a suspicion that you have the illness. You should contact a leading BOE insurance attorney at DarrasLaw to evaluate your policy and see what evidence of disability you will need to provide to use your BOE policy to cover your absence due to COVID-19 or other disabling situations.
- Your BOE insurance will end when you recover enough to return to work. If you can return to work on a limited basis, but cannot resume your full work responsibilities, you may need to determine when your coverage expires. Work with your doctor to create a plan to return to work that fits with your company’s needs and the requirements of your insurance policy. If you have COVID-19 and need to remain isolated and out of work until a second negative test, which could indicate a full recovery and a lack of contagion, consult our top-rated BOE insurance attorneys for a free policy review.
Does your policy offer partial disability insurance?
Some BOE policies will offer partial disability insurance. If you cannot do all of your occupational responsibilities due to a partial disability, you might still receive some coverage for your business operational expenses.
If, for example, you, as a doctor, can only work partial days due to your disability, your BOE insurance may cover the costs of another doctor coming in part time to see your remaining patients, or it might offer some coverage that will alleviate stress while you cannot see enough patients to cover the usual office bills.
Make sure you understand what qualifies as a partial disability and whether you need to be totally disabled first, before you can make a residual claim. You may also claim partial disability insurance during your recovery, when you cannot fully return, but can take on some of your responsibilities. Be aware, most BOE policies only offer between 30-90 days of residual coverage.
Call Our Top-Rated Disability Insurance Law Firm Today
Do you have business overhead expense insurance that will help cover your business if you suffer partial or full disability? Are you planning to purchase a BOE policy?
Make sure you have the coverage you really need to protect your business. At DarrasLaw, our seasoned disability insurance lawyers can help evaluate your policy and make sure it provides the vital coverage you need for your business.
Do you need help filing a valid claim? Contact DarrasLaw today or call us at (800) 458-4577 for a free policy review and free case evaluation. We can also provide advice if the insurance company delays, denies, or terminates your claim.
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