Final answer:
True,Business Overhead Expense Insurance is designed to cover business expenses when a business owner is disabled, and the statement is true. This insurance helps maintain business operations by covering necessary administrative and operational costs.
Step-by-step explanation:
Business Overhead Expense Insurance does indeed cover the business expenses when a business owner becomes disabled, ensuring that these operating costs are covered while the owner is unable to work. This correctness of this statement can be affirmed as 'True'.
Business overhead includes various administrative costs such as salaries for employees, rent for office space, utilities, and other recurring monthly expenses that are necessary to keep the business operational.Understanding the various types of insurance is crucial for business owners.
For example, while Workman's compensation insurance is related and covers benefits for employees injured on the job, Business Overhead Expense Insurance specifically aids the owner in maintaining business operations during their incapacity.
The operation of an insurance company involves collecting premiums which should cover not only the claims but also the administrative costs of running the company and allow for profits.
Thus, Business Overhead Expense Insurance falls within the framework of these principles, reflecting the aspect of covering operational costs during unforeseen events affecting business continuity.