What is Business Expenses Insurance?
Business Expenses Insurance provides you with
funds to cover your fixed business expenses. If
you can’t work due to sickness or injury,
business expenses insurance will continue to pay
for these costs for up to one year. Think of it
as Income Protection for your business.
Who needs it?
Any sole trader or partnership that will
continue to incur expenses if you are unable to
work and generate revenue.
Why do I need it?
While you are at home recovering, your business
will continue to have expenses, such as
telephone, rent, leases, electricity. Business
Expenses Insurance is designed to cover these
costs for up to 12 months. It can even cover the
wages on non-revenue generating employees.
Consider the impact this could have on your
personal financial situation. The income
protection you receive or funds you have saved
will be used to pay for these continuing
business expenses. How much does that leave for
you to pay the mortgage, groceries and other
monthly costs? What affect will this have on
your credit rating if your business expenses
don’t get paid?
How does it work?
There is the waiting period and the benefit
period. The waiting period acts like an excess
on your car insurance in that the greater the
waiting period, the lower the premium. During
this period you self-insure the first instance
of sickness or accident. After that, if you
satisfy qualification conditions, your benefit
payments begin. Benefits will continue for as
long as you continue to satisfy claim
conditions, up to a maximum of one year.
Business Expenses Protection - Claire’s story
Claire (44) is a businesswoman who has been
running a successful event management company
for the past five years.
Claire currently employs a junior consultant,
and between them they manage all of the
administration, sales and event management
aspects of the business.
The business was a great success however, Claire
began to suffer from severe headaches and
tiredness. After a number of visits to her
doctor, tests were conducted which detected a
severe virus. Claire was diagnosed with chronic
fatigue and, as a result, was advised to
undertake six months rest to aid her recovery.
Fortunately, on the recommendation of her
adviser, Claire had taken out stand-alone
Business Overheads Cover insurance with
CommInsure once she had been in business for
When Claire received her diagnosis, she
contacted her adviser. He explained that she
could submit a claim for the fixed, regular
operating expenses of her business. Claire’s
claim was processed and she has been paid a
monthly payment of $3,500 for the past 6 months.
The money has assisted in paying rent,
electricity, car registration and insurance, as
well as business insurance premiums.
Business Overheads Cover means Claire is free to
focus on her health without the added worry of
the financial pressures associated with her
business and the need to generate income to
cover the day-to-day operating expenses. Under
the terms of the insurance policy, Claire is
also able to catch up with her junior consultant
and check emails for a maximum of ten hours per
The insurance policy provides Claire with the
reassurance that she will have a saleable
business asset if she is prevented from
returning to her business because of her
This case study is a hypothetical story taken
from CommInsure’s Insurance for Business
brochure, 10 January 2007. The names and any
identifying features do not reflect any