What is business-overhead-expense disability insurance?
Business-overhead-expense (BOE) disability insurance is intended to help pay eligible ongoing business expenses, as the policy defines them, while the insured owner is disabled, so the business has a better chance of operating during recovery. Which expenses qualify — and whether items such as rent, utilities, employee wages, loan payments or taxes are included at all — is set by the contract; no particular expense is assured of being covered.
It is different from personal disability-income coverage, which replaces part of the owner's own earnings. BOE coverage is generally not designed to replace the owner's pay, and eligible expenses, limits, benefit duration, waiting periods and exclusions are defined by the contract.
IRS Publication 334, written for sole proprietors and other small-business filers, includes overhead insurance for business expenses during long periods of disability in its list of business insurance whose premiums can be deductible. That is not a universal deduction rule for every owner, entity or arrangement; how premiums and any benefits are treated for a specific business is determined with a CPA.
Reviewed by Bay Area Wealth Advisors. Last reviewed 2026-10-01. Educational information only — not individualized financial, tax or legal advice.