In 2019, did you expect that a pandemic would sweep the nation? Some practice owners faced insurmountable obstacles outside their control and their practices did not survive. Those that still own viable practices may be thinking of ways to better protect their practices in the future. Though there is no insurance against a pandemic, there are types of coverage that can help provide additional financial protection for your practice.

One such type is Business Overhead Expense (BOE) insurance.

What is Business Overhead Expense Insurance?

You may have heard of Business Interruption insurance. This type of policy pays you a benefit if your practice must shut down due to property damage or another specific covered event. In a similar way, Business Overhead Expense insurance helps pay your practice’s operating costs when you (as a practice owner or partner) are sick or injured and cannot work.

During a severe illness or after a serious injury, thinking of your practice’s financial health could be steeped in uncertainty. But BOE insurance can help provide solutions. You may wonder:

I’m not working and bringing in revenue. How will I pay my staff and cover expenses?

Use your benefits to help cover staff salaries. You can choose coverage that pays up to $50,000 per month to help cover expenses like salaries, taxes, rent, utilities, and more.

Who will see my patients if I can’t come to work for an extended period of time? Will they go to another practice?

Use the BOE benefit to help pay for a locum tenens physician to take care of your patients until you’re ready to return to work.

Without financial protection, your practice could suffer severely if you aren’t able to work. Even if you are able to cover rent and utilities by using savings, there is a real possibility that your staff and patients could go to another practice if their needs are not fully met. Business Overhead Expense insurance provides a benefit that can be used to keep your staff working, and your patients receiving continuity of care. In a very real sense, BOE insurance can help keep your practice operating and therefore viable.

A Different Type of Disability Insurance

Most physicians see the practical value in having personal disability insurance. They want to help protect their personal income if they become seriously sick or injured. But personal disability insurance coverage is not designed to do double duty. It may be able to cover a portion of your personal expenses, but it will likely not be able to keep your practice afloat as well.

Without BOE insurance, if you own a practice, a serious but temporary health setback could have permanent financial consequences.

Practical Solutions for Practice Partners

In most group practices where costs are shared, each physician covers a portion of the office overhead expenses. With BOE insurance, each partner has more assurance that the disabled physician's portion of practice expenses may be covered. The BOE insurance benefits can also benefit the practice partners by providing funds for locum tenens services. In this way, the patient load does not become a burden to other partners while the sick or injured physician is recovering.

Coverage You Can Trust from a Respected Source

TMA members have exclusive access to the TMA Member BOE Plan issued by The Prudential Insurance Company of America. This policy has special benefits that were designed with member needs in mind, including:

• Higher coverage amount: it pays a monthly benefit of up to $50,000 per month to cover overhead expenses.
• Extension of benefit period: it pays benefits up to 24 months¹ and a possible extension of up to 36 months when your benefits are not fully used during the first 24 months.
• Affordability: this plan often has a lower cost than other competing carriers. 
• Retroactive benefits: this plan makes the first payment retroactively after you have been disabled for 30 continuous days.
• Waiver of premium: during the time you are disabled, your premiums are waived, so that coverage will continue at no cost to you.

A Measure of Confidence in an Uncertain World

You’ve worked hard to build your practice and have achieved much-deserved success.  Given the current uncertainty we all live with, now is the right time to consider BOE insurance. With TMA Member Business Overhead Expense insurance, you can help protect your practice’s financial viability (and your future) by covering the essential business expenses of your practice.

For over 60 years, TMA Insurance Trust advisors have been serving Texas physicians, their families and staff. TMA Insurance Trust prides itself on offering unbiased information and strategies to members, along with exclusive group rates on a range of the highest-rated plans in the industry.