Business Expenses cover is designed to provide for the reimbursement of the normal day to day running expenses of a business during a period of Disability. Up to 100% of "eligible" expenses may be insured under this type of policy.
"Eligible" business expenses include, but are not limited to, the following:
- Accounting/Audit Fees
- Advertising costs
- Bank Charges
- Interest on loans
- Depreciation of equipment/plant
- Electricity, gas, heating, water, telephone, cleaning, laundry, postage, couriers
- Property rates and taxes, rent
- Publications/Subscriptions to professional associations
- Leasing costs of plant and equipment
- Business-related insurance premiums
- Salaries and other related costs (eg: pay roll tax, superannuation contributions, FBT) for non-income generating employees of the business
- Motor vehicle costs
- Net cost of a Locum.That is; a direct replacement of the insured from a source outside the business, less the business income generated by the Locum. Prepaid or accrued expenses will be apportioned over the period to which they relate.
Business Expenses not covered are: Salaries and other related costs for the insured and income generating employees; costs in relation to any relatives unless they have worked continuously for a period of 60 days prior to claim; commissions and bonuses payable to the insured; repayment of the principal of any loans or other finance agreement; any costs of a capital nature; depreciation on real estate; losses on Investments and taxes levied pursuant to the Income Tax Assessment Act.
Business Expenses cover forms an important part of a comprehensive risk management plan for self-employed individuals. These policies will ensure that the personal cash flow of the business is not jeopardised by the ongoing need to meet business expense obligations should the insured be sick or injured and unable to work.