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Why Business Overhead Expense Coverage is Necessary for Healthcare Professionals

By Courtney Lee 12:10 pm MDT 10/13/2020

Becoming disabled is never convenient. But when a business owner becomes disabled, it affects more than one person–the entire business is at risk. Not only are the owner’s income and assets in jeopardy, but their business partners and employees are also at risk of losing vital income. 

The average disability episode lasts over 31 months. If there’s going to be a long absence, then financial considerations will need to be made. These are the reasons that business overhead expense Insurance coverage may bring many business owners peace of mind.

In particular, doctors, dentists, and other healthcare professionals are at risk of suffering from devastating business losses in the event of a long-term disability. Many healthcare professionals work in private practices, which are essentially highly-specialized small businesses.

A doctor’s income supports the business through expenses like office rental, medical supplies, and payroll expenses. And specialists are high-earners whose practices own lots of pricey specialized equipment and supplies. They may also employ highly-skilled nursing staff or medical assistants.

These are a few of the reasons healthcare professionals, especially specialists, should consider high-quality business overhead expense coverage.

What is Business Overhead Expense Coverage?

Business overhead expense (sometimes called BOE) disability coverage is a type of disability insurance designed to cover the everyday operating expenses when one of the people instrumental in the business’ daily functions is unable to work. BOE goes beyond typical disability insurance because it offers some features that make it easier for an enterprise to keep running seamlessly without a lot of red tape.

BOE coverage covers most types of business operation expenses like:

  • Rent and utilities
  • Salaries and payroll taxes
  • Business debts
  • Insurance premiums
  • Equipment and supplies
  • Professional fees (e.g., accounting, legal)

What BOE topics should you be prepared to speak to your healthcare professional clients and prospects about?

BOE insurance is not a simple, run-of-the-mill type of policy. When considering different BOE policies, it’s crucial to know which elements to focus on.

How does the policy define disability? It’s essential to understand the way that any disability-related policy defines disability. For most workers, the best type of disability insurance is “own occupation,” which means that it defines a disability as a condition that would preclude a worker from working in his or her own occupation. However, healthcare professionals often have a highly-specialized area of expertise. Because of that, healthcare professionals need to find coverage that is not only “own occupation,” but “own procedure.” This means that disability benefits would activate once  the physician, dentist, specialist, or other healthcare professional could no longer perform the CPT/CDT procedures they regularly performed over the past twelve months.

What’s the application, underwriting, and payout process like? No one is prepared for a disability. For a practice to keep running smoothly without unprofessional interruptions, the application process must be fast and easy, especially since one of the business’s main players might be out of commission. It’s also vital to look for a BOE policy that is structured with indemnity that will pay out benefits without the need for lots of reimbursement paperwork.

How does the policy define partial disability? The way a policy defines disability is very important–especially when it comes to partial disability. A less than comprehensive policy might declare a healthcare professional ready to return to work in some part-time capacity, well-before an experienced pro with special skills deems himself ready to return.

How does the policy determine the payout amount?  It’s crucial to find a policy that will ensure that healthcare professionals are not disqualified from benefits if they work part-time. An indexed policy adjusts over time based on pre-disability earnings. An acceptable policy will use an index of around 5%.

Hopefully, this article makes the importance of business overhead expense insurance coverage clear. Continue to explore The Broker Advisor for more ways to compete in the healthcare professional disability insurance market.

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Healthcare workers are risking their lives to care for their patients. They are also witnessing widespread sickness and suffering while dealing with concerns about having enough PPE and life-saving equipment to do their jobs. As a result, these medical workers face trauma, sadness, and fear of what will happen next.

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