Disability insurance provides policyholders with coverage that replaces a portion of an employer’s or employee’s income if he or she becomes too sick or disabled to return to the job.

While many small business owners carry a variety of other insurance plans (health, fire, theft, and life), a smaller percentage maintain plans that cover themselves or their employees in the event of long-term disabilities. Many business experts state, however, that small businesses that do not carry such coverage are courting disaster. They note, for instance, that according to the National Association of Insurance Commissioners, a 35-year-old person has a 50 percent chance of being struck down by a disability of three months or longer before he or she turns 65, and that in a partnership of two 35-year-olds, the odds of a long (three months or more) disability striking one of them before they turn 65 jumps to 75 percent.

Moreover, Bob D’Angelo noted in San Diego Business Journal that people in their early 30’s are three times more likely to suffer a disability lasting three months or longer than to die, and people in their early 50’s are twice as likely to be on the disabled list than to die, yet disability insurance coverage continues to lag behind other forms of business insurance. “While most employers recognize the need for health and life insurance,” wrote D’Angelo, “relatively few are aware that the greatest threat to their own and their employees’ livelihood is long-term disability. Indeed, the viability of a business could be at stake if a disabling illness or injury strikes a key executive.”