What does a Business Overhead Expense policy primarily cover for small business owners?

A Business Overhead Expense (BOE) policy is specifically designed to assist small business owners by covering essential fixed business expenses during a time when the owner is unable to work due to disability or illness. This type of insurance ensures that the business can continue to pay for necessary operational costs, such as rent, utilities, and other recurring bills, even if the owner is not actively generating income.

The emphasis on fixed business expenses is crucial because these costs are unavoidable and need to be met to maintain the business's viability. By providing financial support for these expenses, the BOE policy helps safeguard the business's future and allows the owner to focus on recovery without the added stress of potential financial ruin.

Understanding this coverage is important for business owners, as it allows them to plan better for unexpected events that could disrupt their operations. Other options, such as employee salaries, inventory losses, or advertising costs, may not align with the core purpose of the BOE policy, which is focused on maintaining essential business operations rather than managing workforce payroll or marketing expenses.