What is business expenses insurance cover?
There are many different insurances that a self employed doctor should consider – medical indemnity insurance, public liability insurance, contents insurance and business interruption insurance. One insurance that is often overlooked is business expenses insurance.
Business expenses insurance is similar to income protection insurance and provides an additional level of protection for business owners. The cover, which is also known as business overhead expense insurance, pays a monthly benefit to cover costs incurred by the business if the owner suffers an illness or injury and is unable to work. The benefit is generally payable for up to 12 months and will begin to provide a monthly benefit after 30 days – the standard waiting period.
What does business expenses insurance cover?
Business expenses insurance covers a wide range of costs your business must pay on a regular basis. It covers explicit expenses rather than expected profits. You are able to insure up to 100% of eligible business costs which includes:
- Office rent or property rates
- Regular business mortgage repayments or business loan instalments
- Equipment leasing costs
- Providing for salaries for employed staff who don’t directly produce income for the business such as receptionists or practice managers
- Business related insurance premiums such as indemnity insurance
- Net costs associated with employing a locum
- Membership fees, publications, and subscriptions to professional bodies
Does income protection insurance help cover business expenses?
While many business owners already have other insurances such as income protection, life, total and permanent disability and trauma insurance, the aim of these covers are to support you and your family rather than your business. Income protection is used to replace your income, to pay for ongoing personal expenses such as mortgage repayments, day-to-day bills and groceries.
Is business expenses insurance different from personal insurance?
Life insurance, total and permanent disability and trauma insurance all provide a lump sum if you either pass away, become permanently disabled and can never work again or are diagnosed with an insured serious medical condition.
These covers are commonly used to pay out debts, provide ongoing income streams for family, school fees and provide for any medical expenses that may arise. While the funds could be used for ongoing business expenses this would take away from the other purposes of the protection. Ideally you have separate policies that function to cover those specific circumstances.
Business expenses insurance is a cover that is there purely as a safeguard to ensure that if you are off work for a period of time, you don’t need to use your savings, income protection benefits or borrow additional funds to keep the doors of your business open.
When should I apply for business expenses cover?
Ideally business expenses insurance should be considered as soon as you are running a business that has fixed costs that would continue if you are unable to work. The cover will provide funds to cover these fixed costs for a 12-month period, which will allow time to either recover and return to work or alternatively, if it is likely that you will be unable to return to work, the time to either wrap-up or sell the business.
Providing peace of mind
Having business expenses insurance is a great way to ensure that no matter what happens, your business and staff are protected and covered. It can be an unpredictable world and having the right level of protection in place is key to securing an empowered financial future. If you’d like to discuss business expenses insurance further with one of our specialist insurance team members, click this link here for a free, no-obligation consultation.
Disclaimer: * The information contained in this site is general and is not intended to serve as advice as your personal circumstances have not been considered. DPM Financial Services Group recommends you obtain personal advice concerning specific matters before making a decision.
