If you are self-employed, what would happen to your business and employees if you became disabled? Many of my clients come to see me about claims under their Individual Disability insurance coverage, but most have not thought to buy Overhead Expense coverage to supplement their private or group disability insurance. Worse, some do not even know that their insurance agent had the forethought to have them buy Overhead Expense coverage, and they forget to make a timely claim for Overhead Expense benefits.
What is Overhead Expense Insurance? Overhead Expense coverage pays benefits to a business owner in case they (or one of their co-owners or partners) become disabled due to a sickness or injury. The idea is that you want to keep your business going while you are trying to recover from a serious illness or injury. It usually pays for no more than 2 to 3 years.
What Does Overhead Expense Insurance cover? It depends upon the particular policy (and you should always read the policy language to be sure), but typically Overhead Expense coverage will pay for things like insurance, office supplies, postage, rent, salaries, utilities, etc.
Do you have to be disabled from any occupation or just the role of business owner? Again, the policy language will address this. If you are in the market for this type of insurance, tell your insurance agent that you want coverage that defines disability as your inability to engage in all of the duties of your occupation. They call this "own occupation" coverage. That way, if you cannot do part of your job, then the benefits kick in. Insurance companies have many different types of policies though, so beware that you are not buying something that has a very narrow definition of disability that you may never meet.
Who Should Buy Overhead Expense Insurance? Any business owner or group of owners that are concerned about how the business will stay afloat if one or more owners becomes disabled. This is particularly key in new or small businesses.
I often represent business owners and professionals that wish they had this coverage when they become disabled. Consider a small business that employs 10 people, but the owner plays a key role in providing the service or product. If the owner gets cancer and is treated for a year, but cannot work, Overhead Expense coverage may save their business. Without it, they may have to start over after they recover. Alternatively, it may buy some time for them to sell the business while they recover or if they decide they cannot return to work due to their disability.
FREE INSURANCE POLICY REVIEW: Tucker & Ludin, P.A. provides free insurance reviews for anyone who wants to have their disability insurance coverage analyzed. If you want an opinion about the terms of your insurance policy (not the amount, but the actual language), from someone who is not an insurance agent, feel free to call us. As attorneys that represent people in disability insurance claims and lawsuits, we will provide you with an unbiased opinion about what coverage you purchased. The time to understand your disability insurance and know what you bought is BEFORE you become disabled. Call us at (866) 282-5260 to schedule your free insurance review.
Copyright (c) 2010 by John V. Tucker and Tucker & Ludin, P.A. All rights reserved. For assistance with your Long Term Disability claim, ERISA Disability benefit claim, Social Security Disability claim, or Veterans Disability compensation or pension claim, call Disability Lawyer John Tucker at (866) 282-5260.
