AD Banker Comprehensive Practice Exam

With a Business Overhead Expense Policy, what is NOT typically covered?

1. Utilities

2. Office rent

3. Employee labor

4. Salary or profit of the business owner

The correct answer is: Office rent

A Business Overhead Expense Policy is designed to help cover the ongoing costs of running a business when the owner becomes unable to work due to disability or illness. This type of insurance typically covers essential expenses such as utilities, office rent, and employee labor, as these are critical to maintaining the business operations even in the owner's absence. However, the salary or profit of the business owner is generally not covered under a Business Overhead Expense Policy. The policy focuses on essential operational costs rather than compensating the owner directly for their income or profit. Therefore, while the policy ensures that necessary expenses continue to be paid, it does not replace the owner's income, making it clear that their salary or profit is outside of what the policy is designed to cover.