Question

If a small business owner becomes disabled, what expenses will not be reimbursed by the Business Overhead Expense Policy?

Answer 1

A Business Overhead Expense Policy generally reimburses necessary operational expenses for a small business if the owner becomes disabled, but it does not cover expenses such as non-employee salaries, lost profits, non-ordinary business expenses, or the business owner's personal expenses.

Step-by-step explanation:

If a small business owner becomes disabled, a Business Overhead Expense (BOE) Policy typically reimburses the owner for actual expenses necessary to keep the business operational. However, there are certain expenses that a BOE policy does not cover. Typically, these non-reimbursable expenses include but are not limited to:

Salaries of individuals who are not employees (like contracted workers)

• Profits that the business would have made if the owner had not become disabled
• Expenses for items that are not deemed ordinary and necessary for the operation of the business
• Any personal expenses of the business owner, including the owner's salary replacement

It is important to review the specific terms and conditions of the BOE policy to understand the full scope of expenses that are and are not covered.