PSI Ohio Insurance Practice Exam

Key person disability income insurance premiums are not tax deductible for the business. This type of insurance is designed to provide income to the business if a key employee becomes disabled and is unable to work. While businesses can often deduct premiums for various types of insurance that protect their operations or cover employee health, key person insurance serves a specific function of insuring against the loss of an individual's income contribution rather than protecting business assets or liabilities.

In contrast, general liability insurance, employee health insurance, and property insurance are typically considered necessary expenses for running a business and are therefore generally tax deductible, as they directly relate to protecting the business's financial interests and operational viability.