Physician Practice Disability Insurance Products
Let us help you address your physician practice disability insurance needs. These insurance policies are commonly obtained by physician practice owners & partnerships to protect their entity.
Business Overhead Expense Insurance
Business Overhead Expense, commonly referred to as "BOE", ensures your physician practice can continue operating if you become disabled. The policy would reimburse you for essential physician practice operating expenses, helping to keep the business running while you focus on your disability recovery. Key highlights include:
- Expense Coverage: Covers rent, utilities, employee salaries, taxes, and even a replacement physician's income to prevent financial strain on your practice.
- Does NOT Cover Your Lost Income: These policies will not help replace your personal income during a disabling event. Therefore, an individual disability insurance policy is still a necessity.
- Customizable Policies: Tailored to match your business's unique overhead needs for comprehensive protection.
- Short-Term Focus: Designed for temporary coverage, typically up to two years, providing critical support during recovery or business transitions.
- Commonly Required as a Collateral Assignment for Physician Practice Loans: This is one of the common products that many banks will require you to obtain and collaterally assign against your loan. This is meant to protect your business, but can also be used to cover your business loan repayment if you are unable to generate revenue for your practice.
Disability Buy-Out Insurance
Disability insurance buy-out provides financial protection in the event a partner becomes disabled and can no longer continue working in the practice. This policy funds the buy-out of the disabled partner's share, all while protecting other business owners from any threat that disability could impose on the practice. Disability buy-out insurance is an important consideration for any business continuation or succession plan. Key benefits include:
- Simple Business Valuation: Disability buy-out insurance includes an easy-to-understand business valuation formula, making it straightforward to explain and use when determining the disabled partner's buy-out amount.
- Flexible Coverage Options: Policies offer flexibility to transfer coverage to a new practice or convert it to individual income protection if the buy-out policy is no longer needed.
This coverage ensures that both the remaining partners and the disabled partner are financially protected, facilitating a smooth transition in the event of a disability.
Key Person Disability Insurance
Physicians, Physician Assistants (PAs), Nurse Practitioners (NPs), Medical Assistants (MAs), Practice Managers, Registered Nurses (RNs), and many more. These may be a physician practice's key employees that are essential to the practice's success. Whether these employees are valuable because of their expertise, power, innovation, or information, losing them (even temporarily) could be incredibly detrimental to a practice.
Key-Person Disability Insurance provides crucial benefits to protect the practice financially if a key physician, or employee, can no longer work due to a disability. Key Person policies provide cash flow to help practices move forward and maintain a profit if a key physician becomes disabled. For example, the physician practice could use the key person benefits to hire a temporary physician should the disabled employee’s prognosis appear to be a short-term disability. In the unfortunate circumstance of a permanent disability, benefits would then be used to help defray the costs of hiring a replacement.
High-Limit Disability Insurance Policies
Most traditional disability insurance companies will insure up to a $30,000 monthly benefit, which is adequate for most. However, for extremely high-earning medical or dental professionals, it may not be enough. High-limit disability insurance is designed to provide you additional coverage covering closer to 65% of your income. This is typically offered on top of any current coverage and could insure up to an additional $20,000. Lloyd's of London is one carrier who can provide High Limit Disability Insurance policies.
