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Business Expenses Insurance

Designed specifically for the self-employed, business expenses insurance provides you with a monthly benefit to help pay for the ongoing fixed expenses of your business in the event you can not work due to sickness or accident.

Business expenses insurance is generally offered as either an option to an income protection policy, or as a stand alone policy.

Am I eligible for Business Expenses Insurance?

To be eligible for business expenses insurance, generally you must be considered self-employed and working full-time hours. Your occupation will generally be considered full-time if you work at least 25 hours per week, for 48 weeks per year (excluding public holidays).

What expenses are covered?

Business expenses cover will generally only cover the regular normal operating expenses of your business, that is, those that are fixed, ongoing expenses. Expenses that are generally covered and those that are not are listed in the below table:

Business Expenses generally covered Business Expenses generally not covered
  • Accounting fees and audit fees
  • Regular advertising costs, postage, printing and stationery
  • Electricity, gas, heating, water, telephone and cleaning costs
  • Security costs
  • Rent, property rates and taxes
  • Membership fees, publications and subscriptions to professional bodies
  • Leasing costs of plant and equipment
  • Bank charges, interest on bank loans
  • Business related insurance premiums (not including premiums on your business expenses cover policy)
  • Salaries and other related costs (e.g. payroll tax, super contributions, FBT) for non-income generating employees of your business
  • Net costs of employing a locum (a person sourced external from the business and is a direct replacement for the insured).
  • Salaries and other related costs (e.g.: payroll, tax, superannuation, FBT) for yourself and income generating employees of the business other than a locum.
  • Salaries and other related costs for any of your relatives or the policy owner unless that person was employed for at least 60 consecutive days prior to your disablement.
  • Commissions or bonuses payable to yourself.
  • Repayments of principal of any loan or other finance agreement.
  • Any costs of a capital nature including the cost of any books, equipment, fittings, fixtures, furniture goods, implements, merchandise or stock.
  • Depreciation on real estate.
  • Losses on investments.
  • Taxes, other than in respect of related costs for non income generating employees as above.
  • Any payment which we determine on a fair and reasonable basis not to be a regular operating expense.




How long is the Waiting Period?

Waiting periods for business expenses cover generally range from 14, 30, 60 or 90 days. You will notice that these waiting period options are shorter than those available under an income protection policy.

The length of your waiting period can vary depending on your occupational rating, with white collar occupations generally attracting shorter waiting periods than blue collar occupations.

How long is the Benefit Period?

Benefit periods for business expenses cover are generally shorter than those of a regular income protection policy, usually ranging from 6 to 12 months, during which time you will receive monthly benefit payments.

The reason why the business expenses insurance benefit period generally ranges from 6 to 12 months is to give you the incentive to recover and return to work or alternatively perhaps decide to sell your business once the benefit period expires.

How much is the monthly Benefit amount?

The maximum monthly benefit amount is generally capped at $60,000 for white collar occupations, while blue collar occupations are usually only eligible for a maximum monthly benefit of up to $25,000.

These amounts can vary between income protection companies therefore it’s advised that you consult your insurer’s Product Disclosure Statement (PDS) for details as to how your type of occupation can affect your maximum monthly benefit amount.

How can I claim on Business Expenses Insurance?

In order to claim on your business expenses cover you will generally need to satisfy the following conditions:

  • Have experienced a sickness or accident and can no longer perform at least one of your income producing duties

  • You can no longer work under advice of a medical practitioner

  • Have remained off work for longer than your waiting period

  • You are not working in any gainful occupation

These conditions may vary between insurers and may also vary between occupation categories. It is therefore important to read through your insurer’s PDS beforehand.

Providing evidence for your claim

When claiming on your business expenses cover, you will generally need to provide your insurer with the following:

  • A completed claim form

  • Evidence of business expenses, for example, copies of invoices, contracts, and profit and loss statements.

If you are considering business expenses cover and would like to have this policy option added onto your income protection policy, please call us on 1300 135 205 to speak with one of our friendly advisers.