Business Overhead Expense Insurance For Your Practice

A practice that relies on a small number of people (or one person) to produce revenue is economically vulnerable if one of those individuals becomes disabled. Business expenses are just as relentless for those who suffer a disability. A business overhead expense (“BOE”) disability policy will cover ongoing operating expenses for a disabled practice-owning physician.

If the insured does become disabled, a BOE policy pays a monthly benefit based on business expenses, not anticipated profits. The following business overhead expenses are covered by BOE insurance:

- Rent or Mortgage Payments
- Employee Salaries and Benefits
- Utility Bills
- Property Taxes
- Accounting Fees, Legal Fees, and Professional Dues
- Malpractice and Other Business Insurance Premiums
- Maintenance and Janitorial Services
- Depreciation
- Interest on Business Debts
- Office Supplies
- Other Fixed Expenses that are Ordinary, Necessary, and Tax Deductible

Some policies even cover the salary of a temporary employee hired to do the duties of the disabled. Income taxes, the cost of inventory, and the cost of furniture are a few expenses that are not covered.

It is advantageous to purchase a BOE insurance policy when you are younger. Not only will you get lower rates, but additional coverage can be purchased later without providing further evidence of medical insurability.

BOE insurance does not protect your ability to generate income—that is what a personal disability policy does. Instead, it allows you to keep your practice open, or at least pay for its expenses until you recover. In the case of a long-term disability, it offers you up to two years to make a business decision about your practice without worrying about accruing debt from business expenses.

Your practice should allow you to earn income, not be a financial parasite if you become disabled. BOE insurance doesn’t just protect your practice… it protects you.