Insurance Issues for Doctors

October 13, 2009
Michael Sheehan

When your medical office is damaged by disaster, you face many of the same expenses that a homeowner does, but with additional business costs that homeowners don't experience.

When your medical office is damaged by fire or other disaster, you face many of the same expenses that a homeowner does — repairing the facility, replacing lost property, perhaps relocating while the work is done. And like a homeowners insurance policy, your business insurance will probably pay for many of these costs. But doctors may also face some problems that homeowners don’t. One is loss of business. If your office is closed as a result of a disaster, will your insurance policy reimburse you for the income you lose and other costs you incur while you can’t see patients

One solution is business interruption coverage, which can cover you for loss of income as well as pay for certain fixed costs, like mortgage payments, that would continue during your practice’s downtime. When shopping for such coverage, say insurance experts, you should understand exactly what the policy will cover. Will it pay for relocation to a temporary office, for example, and will it cover payroll for your staff? When it comes to replacing lost income, you should also know exactly how the insurance company will calculate your income. You should also be aware of other policy terms, such as any waiting period before the policy kicks in and any limit on how long a break the policy will cover. The policy will likely have a deductible or co-pay, or both, and you should know what they are.

You should also know when and why you might not be covered. To get the facts, talk with your insurance agent, who can help you hammer out a business interruption policy that will suit the needs of your practice. In fact, many practice management consultants recommend that you review your entire insurance package with your agent at least once a year.