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Disability Insurance as an Employer

Disability Insurance as an Employer

May 15, 2019

If you are not currently disabled, nor are any of your employees, why should you consider disability insurance for the best interest of your business?

Business Overhead Insurance

If a business owner suffers a disability as a result of an illness or accident, business overhead insurance may be used to cover business expenses including rent, taxes, utilities, and employee compensation while the owner cannot work. Although this type of policy does not cover the owner specifically, it will cover the expenses necessary for the business to continue to operate. Business overhead insurance policies typically have elimination periods of 15 or 30 days and benefit periods between one and two years, so you won’t see a delay in your ability to pay your employees and business-related bills. The benefit amount of the policy depends of the overheard expenses of the business in question.

Of course, if a crucial member to the business—whether that be the owner or otherwise—is unexpectedly inhibited from working due to disability or even death, a business will suffer their individual loss, aside from just overhead expenses. This is why key person disability is also important to consider as a business owner.

Key Person Disability Insurance

Key person disability insurance prevents financial loss for a company in the event that an important member is unable to work by providing compensation to cover expenses for outside help during this time period. The key person’s value is based on the loss of business income that would be necessary to replace that person for an extended time.

The benefit amount can either be paid in monthly installments or a lump sum. Similar to Business Overhead insurance, the policy’s elimination period will be between 30 and 90 days, and the benefit period will be one to two years.

Business overhead insurance and key person disability insurance are great ways for you to protect your business in the event that something happens to you or a key member of your team. Contact us today to discuss business insurance and if it would be beneficial for your specific situation. 

This blog post was originally posted on our dedicated insurance site, 1752 Insurance.