Business Overhead Expense Insurance for Contractors
Direct answer
AEC Benefits is an Ontario brokerage that arranges business overhead expense coverage for contractors. Personal disability insurance replaces an owner income. It does not pay the business rent, equipment leases, insurance, or staff while the owner is off. Business overhead expense (BOE) insurance is the coverage that keeps the doors open during a disability, so the business is still there to come back to. For an owner-dependent construction company, it is one of the most overlooked options.
Key Takeaways
- •Personal disability insurance protects your income; business overhead expense insurance protects the fixed costs that keep the company alive while you recover.
- •BOE typically reimburses eligible ongoing business expenses such as rent, utilities, equipment leases, insurance, and certain staff costs during the owner disability.
- •For an owner-dependent contractor, BOE can be the difference between pausing the business and losing it.
If a construction owner is disabled for months, the bills do not stop. How business overhead expense insurance keeps a contracting business running.
The cost that keeps running when you cannot
When the owner of a construction company is disabled for several months, revenue often falls fast because the owner drives the estimating, the relationships, and the day-to-day. The fixed costs, on the other hand, do not pause. Rent, equipment financing, commercial insurance, software, and core staff still need to be paid.
Business overhead expense insurance is designed for exactly this window. It reimburses eligible ongoing business expenses while the owner is disabled, which keeps the business solvent long enough to either recover and return or transition on the owner terms instead of under pressure.
How BOE fits with the rest of the plan
- Personal disability insurance covers the owner household income.
- Business overhead expense insurance covers the company fixed operating costs.
- Together they protect both sides of an owner-dependent business, which a group LTD plan alone does not address.
Who should look at this most closely
BOE matters most for owners whose business would struggle to cover its fixed costs from cash flow if they were out for three to twelve months. That describes a large share of small and mid-size Ontario contractors.
AEC Benefits can help you separate which costs are truly fixed, estimate how long the business could carry them unaided, and decide whether BOE belongs in your plan. This is educational, not advice, and policy terms vary, so eligible expenses and limits should be confirmed for your situation.
Reviewed by Steffen deGraaf
Steffen brings 20+ years in insurance and group benefits, construction job-site roots, and architectural technology training at Mohawk College. FSRA-regulated insurance broker specializing in Ontario group benefits.
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Construction is in Steffen's blood: job sites as a teenager, architectural technology at Mohawk College, and 20+ years in insurance and group benefits for Ontario employers.
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Frequently Asked Questions
What does business overhead expense insurance cover?
It reimburses eligible ongoing business expenses during an owner disability, typically things like rent, utilities, equipment leases, commercial insurance, and certain staff and administrative costs. It is meant to keep the business operating, not to replace the owner personal income.
How is BOE different from personal disability insurance?
Personal disability insurance replaces the owner income at home. BOE pays the company fixed costs so the business survives the disability period. Owner-dependent contractors usually need both, because each one covers a gap the other does not.
Do I need this if I already have a group LTD plan?
Group LTD does not pay business overhead. It is an income-replacement benefit for individuals, so even a strong group plan leaves the company fixed costs unprotected. BOE is the coverage built for that specific gap.
Related Pages
Want to talk through your options?
If you want real numbers instead of generic plan talk, AEC Benefits can pressure-test pricing, structure, and fit for your team.