Massachusetts MA Business Insurance

Disability Insurance for Businesses

The Basics of Commercial Disability Insurance

Disability Insurance can be used in business as a form of protection, as well as a group benefit for employees. The following are some of the uses of Disability Insurance.

Disability Buy/Sell Agreements

A sole proprietor, partner, or small business owner can plan for disability by using a disability policy to pay lump-sum or installment funds to pay for the business once he/she becomes disabled. Like with a life insurance buy/sell, a partner or fellow employee would take this policy out on behalf of the owner and the benefits would be used to buy the owner's interest in the business if he/she were to become disabled.

Key Person Insurance

As with life insurance, this type of policy is taken out on a key employee in a firm. If the employee were to become disabled, a disability policy, taken out by the owner of the business, would pay the business a monthly income to help with the costs associated with replacing a key employee.

Business Overhead Expense

This type of policy is a disability policy that is taken out to pay for the overhead expenses of the business, to keep it afloat, if the owner or sole proprietor were to become disabled. This type of policy can keep a business going long enough to find someone to replace the owner, or enough time to plan the selling of the business.

Group Disability Insurance

This type of insurance is most often used as an employee benefit. This disability policy will cover a businesses employees if they were to become disabled. The employees would receive a monthly income, set by the plan, if they were to be disabled. This type of benefit can be useful in retaining and attracting employees to one's company.

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