Business overhead expense (BOE) disability insurance — otherwise known as business expense insurance — serves as replacement “resources” in the event that the policyholder is disabled and is rendered incapable of working, thus resulting in diminished revenues. BOE insurance is generally purchased in situations where one (or a few) individuals are responsible for generating business revenue, or are otherwise critical to the basic functioning of the business at-large. For example, a small consulting business with four employees might purchase BOE insurance for its top consultant, as, in the event that the consultant is disabled for a period of time, a substantial portion of client work may grind to a halt.
Insurers often deny BOE insurance claims, or — in some cases — simply undervalue the claim and will payout substantially less than expected. Given that many small and medium-sized businesses are walking a tightrope with regard to their earnings and costs, the insurer’s wrongful denial of a claim, excessive delay in processing a claim, or devaluation of a claim can have significant consequences for the ability of a business to stay afloat. With the aid of a skilled business overhead expense attorney, however, you can effectively challenge the actions taken by the insurer and recover the benefits necessary for your business to survive and eventually thrive.
What Makes BOE Insurance Unique?
BOE insurance coverage is quite different than personal disability coverage (individual or group plan-based). Consider the following.
- Generally speaking, BOE insurance coverage can be quite variable in terms of how long it lasts, but does not exceed four or five years. It is practically unheard of for coverage to extend beyond that period of time, whereas long-term disability coverage for individuals is quite common.
- Illinois state law covers BOE insurance coverage. It is not subject to federal ERISA regulation. As such, bad faith claims can more easily be brought against the insurer for wrongful denial, unreasonable delay, and other conduct that otherwise interferes with the ability of the policyholder to recover their rightful benefits.
- BOE insurance pays out for more than just lost income of the disabled person — it pays out benefits that account for overhead expenses such as rent, utilities, interest payments on debt, employee salaries, payroll taxes, equipment rentals, maintenance, insurance premiums, professional subscription memberships, and more.
- There is typically a benefit “cap” that limits the total benefits available to the policyholder under a BOE insurance plan.
Importantly, BOE insurance does not pay benefits that are based on projections — the policyholder may only claim benefits for actual overhead expenses that is well-supported by the evidence.
- Related Article: 5 FAQs About Private Disability Insurance Claims
Wrongful Denial of BOE Claims
BOE insurance is intended to give a small to medium-sized business (that is dependent on one or a few individuals) room to “breathe” in the event that key individuals become unexpectedly disabled. BOE insurance benefits defray the costs of running the business, allowing the disabled person time to recover from their injuries and return to work, or alternatively, giving the business an opportunity to strategically reinvent itself so as to not be so reliant on the disabled individual.
When an insurer denies a BOE insurance claim, they put the business in an unenviable position where the business must immediately readjust. Small and medium-sized businesses rarely have the ability to adapt so quickly and maintain their revenue stream after the loss of a key individual. As such, it’s critical that you speak with an attorney who will advocate aggressively for benefits on behalf of your business. Those benefits could spell the difference between a successful readjustment period and a business collapse.
Insurers may deny or undervalue legitimate BOE claims for any number of reasons, including but not limited to:
- Expense claim is “too significant” given the evidence
- Covered individual is not actually disabled and can return to work
- Exclusionary clause applies
- And more
In BOE insurance policies, it may be easier to prove that the key individual is disabled, as they are likely to have had a variety of responsibilities that are now impossible to meet given their condition. Whereas a normal employee might arguably be able to return to work and fulfill their duties to a reasonable degree, an employee covered by BOE insurance must have a heightened level of energy and physical/cognitive functioning to accomplish their pre-disability tasks.
Contact Our Team of Experienced Chicago Disability Lawyers Today
Here at Bryant Legal Group, P.C., our disability insurance attorneys have decades of experience helping disabled policyholders challenge the wrongful denial of their claims, including BOE insurance claims. Insurers thrive on the likelihood that a policyholder will eventually relent and accept an undervalued payout, or in the alternative, may resign themselves to a denial. BOE insurance claims tend to be even higher-value than personal disability insurance claims, however, and the consequences even more drastic — if a legitimate BOE insurance claim is denied, a business may be forced to downsize, liquidate, or even declare bankruptcy.
Call (312) 561-3010 today to setup a consultation with a team of experienced Chicago disability lawyers here at Bryant Legal Group, P.C.