Business Overhead Expense Insurance Calculator: Estimate Coverage & Premiums for 2026
Estimate how much Business Overhead Expense (BOE) insurance you need with our free calculator. If you become disabled and can't work, your business expenses don't stop. Rent, employee salaries, utilities, and loan payments continue. BOE insurance covers these costs while you recover. Get instant estimates based on your monthly expenses, number of employees, business type, and risk profile.
Rent, utilities, salaries, etc.
Impacts payroll coverage
Optional; for ratio comparison
Business Overhead Expense (BOE) insurance is a specialized type of disability insurance that covers your business's fixed operating expenses if you become disabled and can't work. Unlike personal disability insurance, which replaces your income, BOE insurance pays your business bills so your company can continue operating while you recover.
The Purpose and Benefits:
- • Keeps your business solvent: Covers fixed expenses like rent, utilities, and employee salaries even when you can't generate revenue
- • Prevents employee layoffs: Ensures you can keep paying your staff during your disability
- • Protects business value: Maintains your business operations so you don't lose clients, contracts, or market position
- • Tax-deductible: Premiums are typically deductible as a business expense
- • Complements disability insurance: Works alongside personal disability insurance to provide complete protection
BOE insurance is especially important for business owners whose operations depend on their active presence. This includes professional practices (dentists, physicians, veterinarians), consulting firms, service businesses, and any company where the owner's absence would significantly impact operations.
Understanding the difference between BOE insurance and disability insurance is crucial for proper business protection. Many business owners think they only need one, but they actually serve different purposes and work best together.
| Feature | BOE Insurance | Disability Insurance |
|---|---|---|
| What It Covers | Business fixed expenses (rent, utilities, employee salaries, loan payments) | Your personal income replacement |
| Who It Protects | Your business operations and employees | You and your family's lifestyle |
| Benefit Duration | Typically 12-24 months | Can be 2 years, 5 years, or to age 65 |
| Tax Treatment | Premiums usually tax-deductible; benefits taxable | Premiums paid with after-tax dollars; benefits tax-free |
| Coverage Amount | Based on monthly business expenses | Based on your personal income |
| Best For | Protecting your business during disability | Protecting your personal finances during disability |
When to Use Each:
Use BOE Insurance When:
- • Your business has significant fixed monthly expenses
- • You have employees who depend on you for payroll
- • Your absence would shut down operations
- • You want to protect your business value
Use Disability Insurance When:
- • You need to replace your personal income
- • You want to protect your family's lifestyle
- • You need longer-term protection (beyond 2 years)
- • You want tax-free benefits
The best strategy: Most business owners should have both BOE insurance and disability insurance. BOE protects your business, while disability insurance protects your personal finances. Together, they provide complete protection during a disability. Use our calculator above to estimate your BOE insurance needs, and consider getting quotes for both types of coverage.
BOE insurance covers your business's fixed operating expenses that continue even when you can't work. Understanding exactly what's covered helps you calculate the right amount of coverage and avoid gaps in protection.
Covered Expenses:
- ✓Rent and lease payments: Office space, warehouse, or retail location rent
- ✓Utilities: Electricity, water, gas, internet, phone service
- ✓Employee salaries (non-owner): Payroll for your staff, including benefits
- ✓Business loan payments: Equipment loans, business lines of credit, SBA loans
- ✓Insurance premiums: Business liability, property, and other business insurance
- ✓Office expenses: Supplies, cleaning services, maintenance contracts
- ✓Professional fees: Accounting, legal, and other professional services
What's NOT Covered:
- ✗Owner's personal income: Your salary or draw from the business
- ✗Replacement employee wages: Cost to hire someone to replace you
- ✗Owner's medical costs: Your personal health insurance or medical bills
- ✗Inventory or equipment replacement: New equipment or inventory purchases
- ✗Business expansion costs: Costs to grow or expand the business
- ✗Variable expenses: Marketing costs, commissions, or revenue-based expenses
- ✗Owner's draw or distributions: Personal income you take from the business
The key distinction is that BOE insurance covers fixed expenses that continue regardless of your ability to work, not variable costs or your personal income. Use our calculator above to estimate your monthly fixed expenses and determine the right coverage amount.
Calculating the right amount of BOE insurance coverage is crucial. Too little coverage leaves you exposed, while too much coverage wastes money. Here's a step-by-step guide to determine your needs.
Step-by-Step Calculation Guide:
- List all fixed monthly expenses: Rent, utilities, employee salaries, loan payments, insurance premiums, and other fixed costs
- Exclude variable expenses: Don't include marketing, commissions, or costs that vary with revenue
- Exclude your personal income: BOE doesn't cover your salary or draw from the business
- Calculate monthly total: Add up all fixed expenses to get your monthly overhead
- Choose coverage duration: Most policies cover 12-24 months. Consider how long it would take to recover or find a replacement
- Multiply monthly expenses by duration: This gives you your total coverage amount
Industry Benchmarks:
- • Professional services: Typically $5,000-$15,000/month in fixed expenses
- • Medical practices: Often $15,000-$30,000/month in fixed expenses
- • Retail businesses: Usually $8,000-$20,000/month in fixed expenses
- • Service businesses: Generally $3,000-$10,000/month in fixed expenses
Use our calculator above to get a personalized estimate. Enter your monthly fixed expenses, number of employees, business type, and desired coverage duration. The calculator will show you estimated premiums and help you find the right balance between coverage and cost.
BOE insurance policies have several key features that affect coverage and cost. Understanding these features helps you choose the right policy for your business.
Elimination Period (Waiting Period):
The elimination period is how long you must be disabled before benefits begin. Common options are 15, 30, 60, or 90 days. Longer elimination periods mean lower premiums, but you'll need to cover expenses yourself during the waiting period.
Example: With a 30-day elimination period, if you become disabled on January 1st, benefits would start on February 1st. You'd need to cover January's expenses yourself.
Benefit Duration:
Benefit duration is how long the policy will pay benefits. Most BOE policies offer 12 or 24 months, though some go up to 36 months. Choose based on how long you think it would take to recover or find a replacement.
Tip: Most disabilities last 6-18 months, so 12-24 month coverage is usually sufficient. Longer coverage costs more but provides extra protection.
Optional Riders and Features:
- • Guaranteed Purchase Option: Allows you to increase coverage later without medical underwriting
- • Salary Replacement Rider: Adds coverage for your personal income (combines BOE and disability insurance)
- • Recovery Benefit: Continues paying benefits for a period after you return to work part-time
- • Residual Disability Benefit: Pays partial benefits if you can work but at reduced capacity
BOE insurance premiums vary based on several factors. Understanding what affects cost helps you find the best value and potentially reduce your premiums.
Factors Affecting Cost:
- • Monthly expenses: Higher expenses mean higher premiums (typically 1-2% of monthly expenses)
- • Coverage duration: Longer benefit periods cost more
- • Elimination period: Longer waiting periods reduce premiums
- • Occupation risk: Higher-risk occupations (construction, healthcare) pay more
- • Age and health: Older applicants or those with health issues pay higher rates
- • Business type: Some industries are considered higher risk
Average Pricing by Industry (2026):
- • Professional services: $150-$400/month for $10,000-$15,000 coverage
- • Medical practices: $300-$600/month for $20,000-$30,000 coverage
- • Retail businesses: $200-$500/month for $10,000-$20,000 coverage
- • Service businesses: $100-$300/month for $5,000-$10,000 coverage
2026 Cost Trends:
BOE insurance premiums have increased 8-12% in 2026 due to rising healthcare costs, increased disability claims, and economic uncertainty. However, premiums remain relatively affordable compared to the protection they provide. Use our calculator to get current estimates for your specific situation.
Ways to Reduce Premiums:
- • Choose a longer elimination period (60-90 days instead of 15-30)
- • Opt for shorter benefit duration if you have a backup plan
- • Shop around and compare quotes from multiple insurers
- • Maintain good health and consider annual health checkups
- • Bundle with other business insurance policies for discounts
What is business overhead expense insurance?
Business Overhead Expense (BOE) insurance is a specialized type of disability insurance that covers your business's fixed operating expenses if you become disabled and can't work. Unlike personal disability insurance, which replaces your income, BOE insurance pays your business bills so your company can continue operating while you recover. It covers expenses like rent, utilities, employee salaries, loan payments, and insurance premiums.
What does business overhead expense insurance cover?
BOE insurance covers fixed business expenses that continue even when you can't work. This includes rent and lease payments, utilities (electricity, water, internet, phone), employee salaries (non-owner), business loan payments, insurance premiums, office expenses, and professional fees. It does NOT cover your personal income, replacement employee wages, your medical costs, inventory or equipment replacement, or business expansion costs.
How much business overhead expense insurance do I need?
Calculate your total monthly fixed business expenses (rent, utilities, employee salaries, loan payments, etc.), then multiply by your desired coverage duration (typically 12-24 months). Most businesses need coverage equal to 12-24 months of fixed expenses. Use our calculator above to get a personalized estimate based on your specific situation.
Is business overhead expense insurance tax deductible?
Yes, BOE insurance premiums are typically tax-deductible as a business expense. However, benefits received are usually taxable as business income. This is different from personal disability insurance, where premiums are paid with after-tax dollars but benefits are tax-free. Consult with a tax professional to understand how BOE insurance affects your specific tax situation.
What is the difference between BOE and disability insurance?
BOE insurance covers your business's fixed expenses (rent, utilities, employee salaries), while disability insurance replaces your personal income. BOE protects your business operations, while disability insurance protects your personal finances. They serve different purposes and work best together. Most business owners should have both types of coverage for complete protection.
Who needs business overhead expense insurance?
Any business owner whose operations depend on their active presence should consider BOE insurance. This includes professional practices (dentists, physicians, veterinarians), consulting firms, service businesses, and any company where the owner's absence would significantly impact operations. If you have significant fixed monthly expenses and employees who depend on you, BOE insurance is especially important.
How much does business overhead expense insurance cost?
BOE insurance typically costs 1-2% of your monthly fixed expenses. For example, if your monthly expenses are $10,000, expect to pay $100-$200 per month. Premiums vary based on coverage duration, elimination period, occupation risk, age, health, and business type. Professional services typically pay $150-$400/month, while medical practices often pay $300-$600/month. Use our calculator to get a personalized estimate.
What is an elimination period?
The elimination period (also called waiting period) is how long you must be disabled before benefits begin. Common options are 15, 30, 60, or 90 days. Longer elimination periods mean lower premiums, but you'll need to cover expenses yourself during the waiting period. For example, with a 30-day elimination period, if you become disabled on January 1st, benefits would start on February 1st.
Can I combine BOE insurance with disability insurance?
Yes, and it's actually the best strategy for most business owners. BOE insurance protects your business expenses, while disability insurance protects your personal income. Together, they provide complete protection during a disability. Some policies even offer a salary replacement rider that combines both types of coverage in one policy.
What happens if I have a permanent disability?
BOE insurance typically pays benefits for the policy's benefit duration (usually 12-24 months), regardless of whether your disability is temporary or permanent. After the benefit period ends, you'd need to rely on other resources like personal disability insurance, savings, or selling the business. Some policies offer longer benefit periods (up to 36 months) for additional protection.
How long does BOE insurance pay benefits?
Most BOE insurance policies pay benefits for 12-24 months, though some offer up to 36 months. The benefit duration is chosen when you purchase the policy. Benefits continue for the full duration as long as you remain disabled and meet the policy's definition of disability. Once you recover and return to work, benefits stop.
What is not covered by BOE insurance?
BOE insurance does NOT cover your personal income, replacement employee wages, your medical costs, inventory or equipment replacement, business expansion costs, variable expenses (marketing, commissions), or your draw or distributions from the business. It only covers fixed operating expenses that continue regardless of your ability to work.
How do I get a business overhead expense insurance quote?
Start by using our calculator above to estimate your coverage needs and premiums. Then contact insurance companies that offer BOE insurance, such as MetLife, Guardian, MassMutual, or professional associations like AICPA for accountants. You'll need to provide information about your business expenses, occupation, health, and desired coverage. Compare quotes from multiple providers to find the best value.
What is a guaranteed purchase option?
A guaranteed purchase option (also called future purchase option) allows you to increase your BOE insurance coverage later without medical underwriting. This is useful if your business grows and expenses increase. You can typically increase coverage on policy anniversaries up to a certain limit, usually 20-30% of your original coverage amount.
What is a salary replacement rider?
A salary replacement rider adds personal income replacement coverage to your BOE insurance policy. This combines both BOE and disability insurance in one policy. It's convenient but may not offer the same flexibility as separate policies. Compare the cost and features of a rider versus separate policies to determine what's best for your situation.
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