Business Expenses Insurance
Business Expenses Insurance is specifically designed for business owners - either partners or shareholders who are employed full-time in the business. Business Expenses Insurance helps ensure that the fixed expenses of a business or practice will still be paid even if a business owner cannot work due to Accident or Sickness. It also covers business expenses, less any amounts reimbursed from elsewhere.
The policy is owned by the business entity (i.e. partnership or company) with the business owner as the life insured. Depending on the insurer, there may be a minimum and maximum number of business owners who can jointly purchase a policy at the same time.
Business expenses insurance is not business insurance
This type of cover should not be confused with business insurance. You may like to think of business expenses insurance as being similar to income protection insurance, however the person/s insured are business owners who are responsible for covering the business's expenses.
Business expenses insurance eligibility
To be eligible for this benefit, you generally need to be able to demonstrate the following:
- Be in an insurable occupation
- Be either sole trader, in a partnership, or be a working director
- Be responsible for paying the business's expenses
Business expenses insurance benefits
The following benefits are typically part of a policy.
Total Disablement benefit - If you are totally or partially disabled longer than your selected waiting period, the life insurance company pays a monthly benefit from the end of the waiting period until the end of the benefit period as long as you remain disabled.
Partial Disablement benefit - a life insurance company will pay a partial benefit if, while covered under business expenses insurance:
- you have been continuously disabled (totally or partially) for the waiting period;
- you have been continuously disabled (totally or partially) since the end of the waiting period; and
- you are now partially disabled.
If you are partially disabled longer than your selected waiting period, the insurer will pay you a monthly benefit from the end of the waiting period until the end of the benefit period as long as you remain partially disabled.
Business Expenses Insurance usually covers the following
- Accounting and audit fees.
- Regular advertising costs, postage, printing and stationery.
- Electricity, gas, heating, water, telephone and cleaning costs.
- Security costs.
- Rent, property rates and taxes.
- Membership fees, publications and subscriptions to professional bodies.
- Leasing costs of plant and equipment.
- Bank charges, interest on business loans.
- Other business related insurance premiums.
- Salaries and other related costs (e.g.: payroll tax, superannuation contributions, FBT) for non-income generating employees of your business.
- Net costs associated with employing a locum.
Business Expenses Insurance does not usually cover the following
- Salaries and other related costs (e.g.: payroll, tax, superannuation, FBT) for yourself and income generating employees of the business other than a locum.
- Salaries and other related costs for any of your relatives or the policy owner
- Commissions or bonuses payable to yourself.
- Repayments of principal of any loan or other finance agreement.
- Any costs of a capital nature including the cost of any books, equipment, fittings, fixtures, furniture goods, implements, merchandise or stock.
- Depreciation on real estate.
- Losses on investments.
- Taxes, other than in respect of related costs for non income generating employees as above.
- Any payment which we determine on a fair and reasonable basis not to be a regular operating expense.
Is your small business expenses protected?
For best quotes contact xLife. Our advisers can find a policy best suited to your business to help ensure your fixed expenses are covered should you suddenly become suffer from a sickness or accident.
However should your employment situation not fit into the norm please contact us and we can investigate other alternatives for you.
Source: AIA 2010
Exclusive Offer! Call xLife on 1300 135 205 today and
save up to 20% on your first year's business expenses premium.
April 2011
