What is Business Expense Insurance?

Business Expense Insurance is an underutilised form of insurance that covers the ongoing fixed costs of a business due to the disablement of an owner.

More important for smaller businesses, Business Expense Insurance ensures that if a business owner is unable to work due to illness or injury in the short term (normally up to 2 years) that ongoing fixed expenses of the business are covered and the business can continue to meet its obligations when turnover/income is reduced. The full amount of fixed business expenses can be insured.

Some typical fixed expenses covered include;

• Rent
• Leases (e.g. Motor, Office Equipment)
• Utilities
• Business Loans

A major difference between Business Expense Insurance and other Keyman Insurance policies is that it is an ongoing monthly payment paid on short term or partial disablement (as opposed to a lump sum payment for total and permanent disablement). It can be particularly useful for smaller business with high fixed costs or ongoing business commitments that are dependent on the income generated by a single or small number of operators.

Business Expenses insurance designed to cover the costs and protect the profitability of the business is generally tax deductible and proceeds are assessable.