Owning a medical practice creates financial responsibilities that don’t stop if you become unable to work. Employee payroll, rent, utilities, business loans, and other expenses may continue even when your ability to generate revenue is limited.
Business overhead disability insurance helps practice owners manage these obligations during a qualifying disability. For physicians, it can be an important complement to individual disability coverage and a broader income protection strategy.
Business overhead expense insurance, also called BOE insurance, reimburses eligible business expenses if a qualifying illness or injury prevents you from working. Benefits are typically available for a limited period, providing time to recover and return to your practice or determine the appropriate next steps for the business.
Unlike individual disability insurance, BOE coverage is intended to address practice expenses rather than replace personal income.
Coverage depends on the contract, but eligible expenses may include:
Some policies may also cover certain administrative services necessary to keep the practice operating.
The primary difference between business overhead expense insurance vs. disability insurance is what each policy protects. Individual disability insurance replaces a portion of your personal income after a qualifying disability. Business overhead insurance reimburses eligible expenses associated with operating your practice.
Physician practice owners may consider both types of coverage when evaluating how a disability could affect their personal and business finances.
Business overhead disability insurance, also called business overhead expense insurance or BOE insurance, helps cover eligible day-to-day practice expenses if an illness or injury prevents you from working. Depending on the policy, covered expenses may include rent or mortgage payments, employee payroll, utilities, business loan payments, taxes, malpractice insurance, and certain administrative services. Benefits may be available for up to 24 months and can often be customized around your practice’s needs.
BOE insurance is designed primarily for business owners who generate a significant portion of their company’s revenue. For physicians who own or share a practice, coverage can help maintain operations during an extended disability and prevent business partners from having to assume your share of eligible overhead expenses.
It depends on your practice and financial obligations. Consider whether you could continue paying your lease, retaining employees, servicing business debt, and covering other expenses if you couldn’t practice for six months or longer. Evaluating how your practice would operate without your income can help determine whether business overhead expense disability insurance fits your financial strategy.
Some programs allow new physician practices to obtain a predetermined amount of coverage based on anticipated practice expenses. Depending on the policy and carrier, you may also be able to customize your coverage as the practice becomes established and its financial needs change.
BOE policies typically include a monthly benefit, an elimination or waiting period, and a defined benefit term. Waiting periods commonly range from 30 to 90 days, while benefit periods are generally shorter than those of individual disability insurance.
Optional features may include residual disability benefits, future purchase options, business loan riders, and substitute salary expense coverage. These can help address partial disabilities, increasing coverage needs, qualifying business loan payments, or the cost of hiring someone to perform your duties.
Now...
Let's Focus On You
