Business expense insurance is different from income protection in that it is designed to provide a business with ‘breathing space’ for a 12 to 18 month period should the person responsible for generating the income become temporarily disabled.

This type of insurance will reimburse up to 100% of the fixed and ongoing costs that are necessarily incurred in running the business.

The purpose of this insurance is to allow for the business to remain viable upon the principal’s return. In cases where the principal will not be in a position to return to the business, it is expected that this form of insurance will allow for the orderly disposal of the business.

Similar to income protection, a business expense policy incorporates a waiting period and benefit period and premiums are dependent on the length of each and the level of cover required.