Designed especially for smaller offices and sole practitioners, the insurance product known as Office Overhead Coverage (or Business/Professional Overhead Expense) can provide a valuable means of financial support to help continue office operations while you are disabled. You probably already have Disability Income insurance to pay for some of your lost income in the event of a disability, but as an owner, sole proprietor, or partner employed by a small firm, have you thought about what harm could be done to your business if you weren’t there because of that disability?
Partners in mid- to large-sized firms would be more assured of a business still there for them after a temporary disability, but the sole practitioner and people in small firms probably don’t have that certainty. Office Overhead Expense insurance pays a monthly benefit based on your share of the office expenses. Generally, the length of the period of benefit payment is limited to one or two years, since it would be unreasonable to expect the business to be able to survive without a key practitioner for any longer than that. But, for a temporary disability, this is a type of insurance coverage you may find invaluable for the continued success of your office.
While long-term or even permanent disabilities may garner the most attention, due to their severity and life altering outcomes, a temporary disability could adversely impact your business’ success if that short-term disability meant you couldn’t cover business expenses.
Some business people may consider Disability Insurance sufficient for all, or most, of their financial needs while disabled. It’s true that Disability Insurance benefits are paid directly to the insured and can be used for any purpose, but the amount of monthly benefit may not be enough to cover both personal and business expenses. Office Overhead Expense insurance benefits might provide that extra layer of protection to enable the office to keep running during your temporary disability.
Office Overhead Coverage plans will generally cover normal and regular business operation expenses, such as rent or mortgage, interest payments on business debts, non-owner employee salaries, and payroll taxes – the kinds of office expenses that must be met with regularity in order for the business to survive.
If you’re the sole practitioner or partner in a small-sized firm who is responsible for the practice’s operating expenses or a portion of those expenses, Office Overhead Expense Insurance is a coverage you should consider, so that your practice is less jeopardized by your temporary disability.