Business Overhead Expense Insurance Calculator
What Is Business Overhead Expense (BOE) Insurance?
Business Overhead Expense (BOE) insurance is a type of disability-related coverage designed to reimburse a business owner for fixed operating expenses if the owner becomes disabled and cannot work. Instead of replacing your personal income, BOE insurance helps keep your business running by covering ongoing overhead costs.
This calculator focuses on estimating how much monthly BOE coverage you may want, based on your current fixed business expenses. It is meant as a starting point for conversations with a licensed insurance professional, not as a quote or recommendation.
Common Expenses BOE Insurance May Cover
Policies vary by insurer, but BOE coverage typically reimburses many regular, necessary overhead items such as:
- Office or facility rent or mortgage payments
- Utilities (electricity, water, gas, internet, phone)
- Non-owner employee wages and payroll taxes
- Professional fees (accountant, bookkeeper, attorney)
- Business insurance premiums (e.g., liability, property)
- Equipment leases and maintenance contracts
- Property taxes and routine operating supplies
Most policies do not cover the disabled owner’s own compensation, the cost of buying out a partner, or long-term capital improvements. Always check specific policy language.
How This BOE Insurance Calculator Works
The core idea behind this tool is simple: your estimated monthly BOE coverage need is based primarily on your average fixed monthly overhead. Many advisors begin by matching coverage roughly to current fixed expenses, then adjusting for your risk tolerance, cash reserves, and how long you expect a disability policy to pay benefits.
At its most basic, the calculator uses the following relationship:
You enter an estimate of your current total fixed monthly overhead. The calculator then returns that same amount as a starting estimate for BOE coverage. In practice, some business owners choose to round up the result to add a small buffer for inflation or unexpected expenses.
Interpreting Your Estimated Coverage
When you see the result, you can read it as:
“If I became disabled and could not work, this is the approximate amount of monthly BOE insurance coverage that might be appropriate to help keep my current business overhead paid.”
A higher result indicates higher ongoing fixed expenses and, typically, a greater need for BOE coverage. A lower result indicates leaner overhead and potentially less coverage required. Remember that the estimate does not incorporate your personal savings, other disability benefits, or detailed underwriting rules.
Worked Example
Consider a small professional practice with the following average fixed monthly expenses:
- Office rent: $3,000
- Staff salaries and payroll taxes: $9,000
- Utilities and communications: $700
- Business insurance premiums: $500
- Equipment leases and maintenance: $800
Their total fixed monthly overhead is:
Using the simple relationship above, the calculator would show an estimated BOE coverage need of roughly $14,000 per month. The owner might then discuss with an insurance professional whether to round this to $15,000 per month, how long benefits should last (e.g., 12, 18, or 24 months), and how this fits with other disability coverage they hold.
BOE Insurance vs. Personal Disability Insurance
Business Overhead Expense insurance is often used alongside personal disability insurance. While both are triggered by disability, they serve different purposes and protect different financial needs.
| Feature | BOE Insurance | Personal Disability Insurance |
|---|---|---|
| Main purpose | Pay business overhead so the practice or company can keep operating while the owner is disabled. | Replace a portion of the insured person’s lost income during disability. |
| Benefits typically paid to | The business, as reimbursement for eligible expenses. | The individual insured (or sometimes their employer under group coverage). |
| What it usually covers | Fixed business expenses such as rent, staff wages, utilities, insurance premiums, and equipment leases. | Personal living expenses funded by the insured’s income, such as housing, groceries, and personal debt. |
| Typical buyers | Owners of small businesses or professional practices with significant ongoing overhead. | Individuals whose household would face hardship if they could not work and earn income. |
| Benefit period | Often shorter (for example 12–24 months) to bridge a disability period or transition plan. | Can be several years or to a specific age (such as age 65), depending on the policy. |
Because they address different risks, many business owners consider both types of coverage. The calculator on this page focuses only on BOE needs, not personal income replacement.
How to Use the Calculator
- Collect recent financial records such as profit-and-loss statements, rent or mortgage invoices, payroll reports, utility bills, and insurance invoices.
- Identify which expenses are fixed and would likely continue even if you were disabled (for example, you would still owe rent, utilities, and staff salaries).
- Add those fixed expenses to determine your total monthly fixed overhead.
- Enter that total in the calculator field and run the calculation.
- Review the estimated monthly BOE coverage result and use it as a discussion point with a licensed insurance professional.
Assumptions and Limitations
This calculator makes several simplifying assumptions so you can get a quick estimate:
- It assumes that your current fixed overhead is a reasonable proxy for future overhead, and it does not project inflation or business growth.
- It does not consider tax treatment of premiums or benefits, which can differ by jurisdiction and policy design.
- It does not model partial disability, changing staffing levels, business sale, or practice closure.
- It does not incorporate underwriting guidelines, benefit caps, elimination periods, or riders offered by specific insurers.
- It does not provide a price or quote for coverage; premiums depend on many factors including age, health, occupation, location, and insurer.
The output is a general educational estimate only. It is not financial, legal, tax, or insurance advice and should not be the sole basis for coverage decisions.
Next Steps and Professional Advice
Use your result as a starting point to:
- Compare your estimated BOE need with any existing disability-related coverage you already have.
- Discuss appropriate coverage amounts, benefit periods, and policy options with a licensed insurance professional or financial advisor.
- Review your business continuity or succession plan to understand how long you would want to keep the business operating during an extended disability.
Every business is unique. A qualified professional who understands your financial situation, business structure, and objectives can help tailor BOE insurance and related strategies to your specific needs.
Results
Disclaimer: This calculator provides educational estimates only and does not constitute professional advice. Consult with qualified professionals for your specific situation.