The insurance physicians often overlook

Most physicians purchase life and disability insurance at the beginning of their careers, but there’s another type of protection they should also consider.

Overhead expense insurance helps keep your practice running if you can’t work because of illness or injury, says Kelly Budden, an OMA Insurance advisor.

“Most physicians understand the need to protect their personal income, but they don’t always consider that their business-related expenses will keep going as well,” says Budden.

What does overhead expense insurance cover?

While personal disability insurance protects a physician’s personal income, overhead expense insurance covers ongoing expenses like rent, utilities, staff salaries, equipment lease payments and other fixed costs.

It should be considered by physicians who have a physical clinic location, employees or any other monthly practice-related expenses, Budden says.

“The purpose is to help keep the practice stable during a period when the physician is focusing on recovery, instead of worrying about how those ongoing bills will get paid,” she says. “Purchasing overhead expense coverage helps to safeguard a physician's personal assets and savings, so they don’t have to be used to cover ongoing practice expenses.”

Budden recommends physicians consider purchasing overhead expense insurance once they begin taking on fixed professional or business expenses.

“That might be when they open a practice, join a clinic with shared costs, hire staff, finance equipment, or sign a lease,” she says. “The key is not to wait until the need feels urgent.”

Start earlier than later

She also advises securing coverage early in your career, before health changes could affect insurability or lead to higher coverage costs.

A minimal amount can be purchased with a guaranteed insurability benefit rider when you move into practice - a helpful option for doctors who start their career as locums before joining a clinic. You can simply build onto your coverage when you need more.

Budden adds that overhead expense insurance shouldn’t be seen as a burden but as protection for something physicians are dedicating their careers to building.

“Protecting both personal income and practice expenses can make a real difference when the unexpected happens.”

Considering this coverage?

Every situation is different. Some factors that could influence the cost of overhead expense insurance include a physician’s age, gender, smoking status, and sometimes pre-existing health conditions.

Connect with a non-commissioned OMA Insurance advisor to discuss your personal coverage options.