Question

James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called

Answer 1

James purchased 'disability overhead expense insurance' to cover the costs of hiring a replacement if he becomes disabled. This policy is separate from workman's compensation, pension insurance, and the requirements of the ADA.

Step-by-step explanation:

James has purchased what sounds like a specialized form of disability coverage known in the insurance industry as 'disability overhead expense insurance'. This policy kicks in when a business owner becomes disabled, helping to cover the costs associated with hiring either a temporary or permanent replacement.

This coverage is different from traditional workman's compensation insurance, which provides benefits to workers who suffer an injury on the job, and is distinct from pension insurance and the direct-purchase insurance individuals buy without employer assistance.

The Americans with Disabilities Act (ADA) also plays a role by preventing discrimination against disabled individuals and ensures accommodations are made for them, but this act doesn't provide insurance coverage for the scenario described in the question.