Key points
- It reimburses fixed business costs (rent, staff, utilities, loan interest) while the owner is disabled, usually for up to one or two years.
- It is separate from disability insurance, which replaces the owner's personal income.
- It suits owner-run businesses: clinics, practices, studios and small offices.
- The premiums are generally deductible as a business expense and the benefits are business income, offset by the costs they pay.
- The owner's own pay and the cost of buying inventory are usually not covered.
What overhead insurance pays
A business overhead expense (BOE) policy pays, after a waiting period, the eligible fixed costs the business keeps carrying while the insured owner is disabled, up to a monthly maximum and for a set benefit period. What counts as eligible is set by the policy. Costs often included are rent or mortgage interest on business premises, salaries of staff who aren't the owner, utilities, leases, professional fees and loan interest. Costs often excluded are the owner's own salary or drawings, and the cost of goods.
Because the policy is tied to the business's actual expenses, insurers usually look at the business's financial statements when cover is set up and when a claim is made. Clean, current books make both easier.
Who usually considers it
- Health practices, such as massage therapists, physiotherapists, dentists and chiropractors with a lease and staff.
- Professional offices, where the owner brings in most of the fees.
- Small shops and studios with a fixed lease and few people.
It matters less where the business runs without the owner, or where fixed costs are small. Many owners look at it alongside personal disability insurance, since one covers the business's bills and the other the household's.
Overhead insurance and tax
The CRA has long treated overhead expense insurance differently from personal income protection. The position it set out in Interpretation Bulletin IT-223, Overhead expense insurance vs. income insurance (archived, then cancelled on 30 September 2012), is in brief:
- Premiums for a policy that reimburses business overhead are generally deductible as a business expense.
- Benefits are generally included in the business's income, and the overhead they pay is deductible as usual, so the two largely offset.
- Personal disability insurance works the other way: premiums you pay are not deductible, and benefits are generally tax-free.
Whether the policy is owned by your corporation or by you as a sole proprietor, and how it is worded, affects the result. Confirm the treatment with us before the policy is put in place.
Where Finvo fits
We record overhead premiums and benefits in your books, keep the financial statements an insurer asks for up to date, and explain how the policy and your personal disability cover fit together on your return and your company's.
Finvo itself does not sell insurance or give insurance advice. Finvo can connect you with a licensed insurance agent from our partner network who can help with insurance advice if you need it. The licensed agent advises on products and coverage; Finvo covers the tax side. Insurance and other specialists are joining Finvo as contractors, so a group of consultants can work on your file together and you don't have to go from place to place.
Whoever you deal with, you can check that an agent is licensed: in British Columbia with the Insurance Council of BC licensee directory, and in Alberta with the Alberta Insurance Council agent lookup.
This page is general information, checked against the sources below on 5 Nov 2026. Every policy and plan has its own terms; it isn't insurance, tax, investment or legal advice for your situation.