PSI Ohio Insurance Practice Exam

Which type of insurance covers operating costs for a business when the owner is disabled?

1. General liability insurance

2. Property insurance

3. Business overhead expense disability insurance

4. Workers' compensation insurance

The correct answer is: Business overhead expense disability insurance

Covers operating costs for a business when the owner becomes disabled is specifically termed as business overhead expense disability insurance. This type of insurance is designed to help pay for the day-to-day expenses of running a business, such as rent, utilities, and salaries, during the period that the owner is unable to work due to a disability. It ensures that the business can maintain operations and sustain itself even in the owner's absence, which is crucial for long-term stability and recovery. General liability insurance protects businesses against claims of bodily injury, property damage, and personal injury, but it does not cover operational costs related to an owner's disability. Property insurance covers damage to the physical assets of a business, like buildings and equipment, but again, does not address the financial impact of an owner being unable to work. Workers' compensation insurance provides benefits to employees who are injured on the job but does not extend coverage to the owner or the operational expenses of the business in the event of the owner's disability.